Online storage and backup services provider will operate under AOL's Digital Services business unit.

America Online, Inc., today announced that it has acquired Xdrive, Inc., a provider of online storage and backup services. Financial terms of the deal were not disclosed.

Xdrive, founded in 1999, will operate as a stand-alone wholly-owned subsidiary of AOL under the Digital Services business unit and continue to be based in California. Current and future subscribers of Xdrive will continue to be able to utilize the full suite of services, in accordance with the Xdrive 'Terms of Service' agreement.

Xdrive manages an online, centralized storage platform that gives subscribers access to, and protection of, all their digital assets - regardless of location used to access the Internet.

"The digitization of consumer home media is skyrocketing, with consumers and AOL members increasingly looking for easier ways to protect and manage a wide variety of important data files and digital media assets," said Gio Hunt, Senior VP of New Business Ventures, AOL Digital Services. "Xdrive will further enhance AOL's consumer storage offerings to deliver a more safe and secure digital lifestyle for our members."

"Our mission has always been to help manage, integrate, and protect consumers' digital assets and enable anytime, anywhere access to files, from any internet connection," said Brett O'Brien, CEO & founder, Xdrive. "This is a great marriage of Xdrive's cutting-edge storage technology with the massive infrastructure, network redundancy and exceptional safety and security reputation of AOL."

The Xdrive transaction is AOL's first major corporate acquisition since Mailblocks, Inc. and Advertising.com in the summer of 2004.