It's no surprise to readers of this here blog that the online backup market is hot. Even so, AOL has managed to fail at it and will be closing the pioneering Xdrive, founded in 1999 and acquired by AOL in 2005 for a reported $30 million. It will be shut down on Jan. 12, 2009.I remember being an early user of Xdrive, which rather than providing a backup application installed software that mapped the X: drive of your Windows machine to their data center. Back in 1999 it was way cool, and as long as you didn't have lots of data to upload free.

Today Mozy, Carbonite, and a hundred or more others offer online backup and AOL is more interested in monetizing its assets via ad sales rather than subscription fees, according to an e-mail AOL exec Kevin Conroy sent out in July that TechCrunch posted here.

Also to close are the BlueString and AOL Photo media sharing sites.

Competitor SpiderOak is offering 10% off to Xdrive users.

While I'm still an online backup fan, do-it-yourself and peer-to-peer systems like CrashPlan are looking like a better idea. I'm becoming a CrashPlan hero for my friends and family letting them backup to my systems. More on that another day.