AT&T to buy advertising technology firm Ingenio

NEW YORK (Reuters) - Top U.S. telephone company AT&T Inc said on Monday it will buy advertising technology company Ingenio to boost its directories business and compete more directly with Google Inc.

The terms of the deal, expected to close in early January 2008, were not disclosed. AT&T said the acquisition will have minimal impact on its financial results.

Ingenio's technology, called "pay per call," allows companies to post online advertisements and pay fees depending on how many phone calls they receive.

Companies, including Microsoft Corp and Yahoo Inc have also been mentioned as potential buyers of Ingenio to compete with Google.

AT&T said it plans to integrate Ingenio's technology into its directory service and local search advertising business.

The deal will make AT&T "somewhat more competitive with Google," while it will help Ingenio gain scale, said Kevin Harvey, general partner at Benchmark Capital, the largest shareholder in Ingenio. He sits on Ingenio's board.

AT&T is the top U.S. telephone service provider, offering YELLOWPAGES.COM, as well as print directories.

(Reporting by Ritsuko Ando, editing by Gerald E. McCormick and Andre Grenon)