America Online, the largest internet services provider worldwide, has made an all-cash deal to buy online marketing company for £435m.

"We will benefit from the incremental revenue from, as well as maximising our own advertising inventory using their technology," said AOL chief executive Jonathan Miller.

An internet analyst at Kaufman Bros, Mark May, said of the deal that AOL "needs to spend considerable amounts of cash to position the company for future growth opportunities, and that Time Warner management is willing to let them do that."