America Online Acquires Xdrive

America Online has acquired Santa Monica-based Xdrive, a provider of online storage and backup services. America Online said this morning that it will operate Xdrive as a stand alone, wholly-owned subsidiary of AOL under its Digital Services business unit. Terms of the deal were not disclosed. Xdrive will continue to be based in Southern California, and subscribers will continue to have access to the service. As reported by in February of this year, Xdrive has been seeking a buyer for the company and has been in talks with major ISPs and portals. The firm had reportedly engaged an investment bank to find a buyer for the company. Sources in the industry said at that time that a sale was long overdue for the firm. Xdrive was founded during the dot-com boom, and had raised over $100M in venture capital from AOL Time Warner, eCompanies, StorageNetworks, Goldman Sachs, EMC, Veritas Software and many others. The company's initial service was marketed at end users looking for online storage, however the service faltered during the dot com crash, and the company attempted expand its services to the corporate market. Xdrive's current 34 employees will join AOL.