AOL Grows IM Network

AOL is expanding the reach of its instant messaging-based ads with the acquisition of Userplane.

Userplane’s customizable, Flash-based chat and IM client is licensed to more than 100,000 Web sites, many of which reach the coveted 18-34 year old demographic. Key customers include, Honda, and Marvel Comics.

AOL will run Userplane as a wholly-owned subsidiary, maintaining its brand, and keeping its 12 employees on board. It will be closely aligned with the AIM team, and will be overseen by Marcien Jenckes, VP for the AIM service. Under AOL, Userplane will begin offering licensees the option of making their IM client interoperable with the AIM network. Userplane advertising operations will also be migrated to AOL’s media networks group.

“Userplane will expand and extend the reach and relevance of the AOL instant messaging franchise, while continuing to provide social networking audiences and specialized communities with brandable clients tailored to meet their needs,” Ted Leonsis, vice chairman and president of AOL’s audience business, said in a statement.

Userplane has two main models to support distribution. A licensed model allows site owners to create a private-label IM client for a monthly fee based on usage. A free, ad-supported model lets sites use the software for free, in exchange for showing display ads on the IM client.

The company recently began offering a hybrid model, where licensees can opt to display ads in exchange for a 50/50 revenue-share. That hybrid model is expected to become more prevalent going forward, according to a spokesperson.

Ads can be targeted by site, or based on demographic information in a user’s profile. Ad units include text ads and banners in various positions within the client. Because Userplane’s client is Flash-based as well as video and rich media, opportunities exist in certain areas of its interface. The company now delivers more than 1 billion ads per month to users who stay engaged for an average of 20 minutes, according to the company.

Financial terms of the deal, which closed last week, were not disclosed. Userplane was previously closely held by its co-founders: CEO Mike Jones, CTO Nate Thelen, and Chief Creative Officer Javier Hall.

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