Financial terms of the deal were not disclosed.
AOL, a subsidiary of media colossus Time Warner, is making the acquisition as competition in the multi-billion dollar online advertising arena intensifies.
Google is expanding its online advertising empire to video and graphics realms with the purchase of ad-targeting powerhouse DoubleClick and Microsoft is trying to keep pace by buying aQuantive Inc.
Yahoo bolstered its position by taking over online advertising exchange Right Media.
TACODA was founded in 2001 and has "patent-pending technologies ... to target relevant messages to specific audience segments," according to AOL.