America Online has agreed to buy online marketing startup Advertising.com for $435 million in cash, in a move aimed at shoring up its ad business among mounting competition from Internet rivals.

Advertising.com operates by acquiring ads from various Web sites, e-mail publishers and search engines and then places the ads for customers using its proprietary AdLearn technology based on objectives such as lead generation and customer acquisition.

The company reported an 80 percent increase in revenues in 2003 to $132 million, with a profit from operations of $12.1 million.

AP: “Online advertising is back,” Miller said in a conference call with reporters. “The acquisition of this already profitable business will extend our reach.” AOL vice chairman Ted Leonsis said the deal will not affect AOL’s privacy policy and that customers’ personal information will remain protected.

More details in press release...