AOL buys contextual search firm

The deal will help AOL offer more relevant search results and boost the accuracy of ad targteting for its publishing network.

Founded in 2005, US- based Sphere uses its contextual technology to make connections between content from blogs, video, media, photos and advertisements.

Results are then displayed in a pop-over window or an integrated widget that lets publishers enhance articles by incorporating related articles and blog posts.

Ron Grant, AOL president and COO, said: "Our focus at AOL is providing consumers relevant content wherever they are on the Web, and Sphere's capabilities fit in perfectly with this effort. Not only will it let us enhance content on our own sites, it will let us distribute our content across Sphere's growing third-party publisher network.

“In addition, this acquisition provides AOL with access to advertising inventory across Sphere's network, while growing its reach to content publishers via the widget."

AOL has previously partnered with Sphere to offer its widget technology on AOL News and the myAOL service and Mgnet.

Sphere’s clients, include Newsweek and Reuters, and its third-party network includes more than 50,000 content publishers and blogs and is live on an average of more than 2 billion article pages across the Web every month, according to the company's internal data.

Financial terms of the deal were not disclosed, but analysts are speculating Sphere may have cost about $25m.

The moves follows AOL parent Time Warner's decision in February to split off AOL’s remaining dial-up business. AOL is also in discussions with Yahoo to ward off a hostile Microsoft takeover.

On Sunday, AOL announced that Verizon Wireless selected AOL's Platform-A as a major advertising provider for its online and mobile Web properties. Verizon will leverage Platform-A's sales force, along with its ad-serving, targeting and inventory-management capabilities for display, mobile and video advertising.