America Online has purchased Lightningcast, a small company that specializes in inserting advertising into video clips.
With the technology, AOL will be able to run targeted ads within video and change ads from time to time without replacing the entire video file, the Associated Press reported. Lightningcast's technology also can insert ads into audio clips.
Lightningcast's technology works with all types of video: live, on-demand streaming and downloads. AOL is currently increasing efforts at driving traffic to free, ad-supported sites to compensate for declines in its traditional business of Internet access subscriptions.
Financial terms of the deal, announced last week, were not disclosed.