AOL Buys Mobile Ad Network

NEW YORK AOL is expanding its Advertising.com network with the addition of Third Screen Media, which places mobile ads.

Advertising.com buys cheap space on sites across the Internet, and then uses cookies to target ads for clients, often charging them either per click or based on a portion of sales. It is the largest graphical ad network.

The acquisition follows the move two weeks ago by Microsoft to buy Third Screen rival ScreenTonic, a Paris-based mobile ad network. Yahoo! is also eyeing mobile advertising, starting its own network for graphical and search placements. Google has thus far made few moves into the mobile ad space.

Mobile advertising is currently a small market, but that is expected to change. ABI Research anticipates $3 billion will be spent on mobile ads this year, rising to $19 billion in 2011.

The addition of mobile networks is part of a drive by the current Internet leaders to extend their reach into new areas, creating ad platforms that can place ads across many forms of digital media. Microsoft, for example, sees its adCenter eventually placing ads on Internet sites, cell phones, video games and Web-enabled TV.

“AOL is one of only four at-scale advertising businesses on the Internet, and the acquisition of Third Screen Media gives us a very strong position in the fast-growing mobile space,” AOL CEO Randy Falco said in a statement.

AOL said Third Screen Media would operate as a subsidiary of Advertising.com and remain headquartered in Boston.

Financial details of the deal were not disclosed.