America Online, Inc. announced that it has acquired broadband video advertising company Lightningcast, Inc.

AOL will now merge Lightningcast streaming media technology and advertising network operations under Advertising.com within AOL's Audience business unit. Advertising.com's newly launched pre-roll video network and the InStream network will merge, operating under the InStream name.

"This deal further validates the online video space as the big media players are stepping into the game," says Jason Glickman, CEO, Tremor Network.

Glickman also said that with the recent news on some large advertisers (Johnson & Johnson, Coca-Cola Co.) sitting out the TV upfront buys, "We are anticipating that the held back budget will shift towards online. Instream online video really speaks to the consumers and advertisers are taking notice. On the agency side, marketers can now go back to their clients and increase their online video budgets."

Earlier this year Lightningcast launched InStream, a video advertising network that provides managed insertion of streaming media advertising and campaign reporting.

"This acquisition will provide a huge infusion of talent, technology and publisher relationships for Advertising.com at a time when streaming video is growing at a blistering pace," says Mike Kelly, president, AOL Media Networks, which oversees Advertising.com. "When we looked at the video ad market we identified and pursued the clear leader-- Lightningcast. This acquisition will allow AOL and Advertising.com to continue to create cutting-edge ad solutions, own and further develop the leading strategic advertising platform, and set the course for the future of online video."