AOL has acquired the online storage company XDrive to meet what it calls a "skyrocketing" demand by its users for storage, who are increasingly storing large audio, photo, and video files within their accounts.

Although XDrive has only 34 employees, its abilities are said to be very significant in enabling AOL to meet the storage challenge posed by the latest behavior on the part of its members, as many as 3 million of whom may be online at any particular time. AOL reportedly plans to run Xdrive as a wholly owned subsidiary and continue to sell storage and backup services through www.xdrive.com.