AOL announced on Thursday that it acquired Lightningcast, a broadband advertising company, as the portal positions itself to cash in on the surging popularity of streaming video.

Lightningcast specializes in inserting video and audio advertising into video carried over high-speed Internet connections. The company also helps advertisers to develop web video ads and to analyze the effectiveness of their messages.

Since June 2004, AOL has snapped up six companies to fatten its online entertainment and advertising business including ad-serving and media-buying company Advertising.com. The financial terms of the Lightningcast acquisition weren’t disclosed.

“This acquisition speaks to two very critical and important strategic goals for AOL this year: growing the advertising business and our commitment to making AOL the destination for video on the web,” AOL spokesman Nicholas Graham told RedHerring.com.

As more people turn to the web for entertainment, portals like AOL, Google, and Yahoo are working feverishly to catch up to advertisers’ growing appetite for premium online space. Analysts predict a significant chunk of online ad dollars will move into online video.

In 2005, Advertisers spent $225 million on online video ads, according to estimates from research firm eMarketer. That figure will grow to $640 million by 2007, and will hit the $1-billion mark in 2008.

“[Online video] really has become a part of the Internet experience. It’s a big deal today and it’s going to be a bigger deal in the next few years,” said Tom MacIsaac, CEO of Lighningcast.

Web portals are continuing to make online video a priority, but capturing the online advertising marketis not a “winner takes all game,” said Will Richmond of Broadband Directions, a Boston consulting company specializing in broadband video.

“I think that the market is still expanding and there’s lots of opportunity for many players right now. If you look by analogy at the number of television networks that have thrived over the years, there is a big audience out there that market participants can attract,” said Mr. Richmond.

“I think that is what the portals will do as well.”