Internet company AOL Inc said on Monday it bought a video production company StudioNow Inc for $36.5 million in cash and stock to expand its technology to create original online programing.

AOL plans to fold StudioNow, which helps users create, store and manage online video, into its, a similar service that manages a wide swath of programing from writing, to photography to video.

The Internet company, recently spun off from Time Warner Inc, is betting that original online video entertainment developed in-house will be as cheap and lure as many as viewers and advertisers as shows licensed from TV and Hollywood studios.

Yahoo and IAC/InteractiveCorp are each pursuing the same strategy.

AOL also said its chief technology officer Ted Cahall resigned and that it is seeking a replacement.

It also named Jeff Reynar head of technology for engineering and products in New York, where he will be in charge of AOL's new New York-based technology center.

Reynar co-founded DBT Labs, a social search service where he was CTO. Before DBT he spent four and a half years at search company Google.

(Reporting by Yinka Adegoke; Editing by Derek Caney)