America Online Inc. said Thursday it has bought the online storage company Xdrive Inc. to meet the growing needs of consumers with rapidly expanding collections of digital music, photos and other files.

AOL did not disclose financial terms but said it would operate Xdrive as a wholly owned subsidiary and continue to sell storage and backup services through Xdrive.com.

Xdrives 34 employees have moved to an existing AOL building in Santa Monica, Calif., the companys current headquarters.

Nonetheless, AOL will likely incorporate Xdrives technologies into its existing services, just as it had after buying anti-spam company Mailblocks Inc. last year. The Xdrive platform will also allow AOL to centralize storage for its e-mail, Web journal, photo and other services and create new options for consumers.

Developing and providing new services for your customer base is all so important these days if you want to continue to grow.
It is not alway possible to develop things inhouse so AOL has gone to market and found an existing company that can provide the services they require.
Continue reading about AOLs new purchase courtesy of this Associated Press report.