AOL has alerted members of the service today that Schwartz has bought back Fleaflicker. As of July 22, AOL will no longer be in control of the site which has dwindled under the control of our parent company. “While we love Fleaflicker (and our users love Fleaflicker), we wanted to find a home for the product where it can receive more love and attention,” is the subtle middle finger in their FAQ.

The good news is that the service now has a new lease of life. The newly created Fleaflicker LLC will continue to operate things without interruption. And all user data will remain intact without users have to do anything (those who do not wish to have their data transfered to the newly-owned service can opt-out). It will also remain free.

The bad news is that the timing of the transition could not be any worse. Every day, it’s looking more and more likely that the NFL lockout will put at least a part of the upcoming season in jeopardy. The NBA also faces a lockout this coming season. This will all be very problematic for fantasy sports in the coming months, to say the least.

Still, let’s hope that Fleaflicker can tap back into their bootstrapped ways and get back to the point that they were at in 2006, when Mike called them the “better” fantasy sports site.

Below, the message to users:

Dear AOL Fleaflicker User:

Fleaflicker has been acquired by its original founder, Ori Schwartz. As of July 22, 2011 AOL will no longer operate the Fleaflicker service.

The good news is that Ori’s company, Fleaflicker LLC, will continue to operate the service without interruption. All your fantasy teams and account information (including your login E-mail) will be transferred to Fleaflicker LLC. Please review the Fleaflicker LLC Terms of Service and Privacy Policy.

Nothing is required of you to continue playing fantasy sports for free on Fleaflicker. However, if you do not want your data to be transferred, you may opt out by clicking here before July 22, 2011. If you do not opt out by this date, we will automatically begin the transition.

Sincerely,

The AOL Fleaflicker Team

For more information on the transfer of your account, please visit our Frequently Asked Questions area at www.fleaflicker.com/transition-faq.

The transaction price isn’t being disclosed. Based on the highly fluctuating traffic to the site and the fact that they only support football (which explains the huge drops in traffic during the off-season), my guess is this is more of a technology acquisition than the buying of the business operations. Fleaflicker also powers the Washington Post’s Fantasy Football leagues.

AOL runs its own very popular fantasy sports sites for football, baseball, racing and golf, and AOL sports is surging in general (more on that in a follow up post).

Fantasy sports is big business online. Figures vary, but estimates place the market at about $1-2 billion with 15-18 million fans following their leagues. Fantasy fans generally run their leagues on services like Yahoo Sports or CBS Sportsline (FleaFlicker is free and ScreamingSports is a good team management service). Players often pick their whole team and ride out the entire season to find a winner.

However, Y Combinator’s DraftMix is doing things a little differently. DraftMix is picking up the pace of fantasy sports by letting you play single fantasy teams head to head. They’ll be hosting games and picking winners as frequently as a weekly basis.

On DraftMix, fantasy sports fans can play single pickup games against each other for virtual dollars, with real money coming in the next couple of weeks. Open live games are listed in a lobby where players take spots in games ranging from 4 to 10 players at a time. Each player buys into a game for a fixed amount (currently only virtual currency). DraftMix also ponies up a nightly cash prize for a free game as well.

When a game is full, players pick their teams from active professional players in timed drafts. Each fantasy manager’s team is scored on their players stats in the upcoming “real world” games. Since stats are needed to find the winning team, the time it takes to finish a game varies by sport. Football fantasy games are finished weekly, since all the teams play each Sunday. Basketball can finish a bit faster since teams play daily. The manager with the most points wins the money pot, with 10% of real cash games going to DraftMix.

Now all this may sound fine playing fantasy sports for fantasy dollars, but doesn’t bringing real money into play amount to internet gambling? No, says co-founder Matt Maroon, who points to the fantasy sports exemption in the “Internet Gambling Prohibition and Enforcement Act”. The act, which was a big blow to sites like PartyPoker, specifically exempts “participation in any fantasy or simulation sports game or educational game or contest”. Fantasy sports is seen as a game of skill and played for a fixed cash prize. Although a quick perusal of the exemption leaves you feeling they’re at least bending the rules.

But other fantasy sports leagues already have similar operations, although they obfuscate the process. CBS Sportsline pays out weekly and seasonal prizes to winning players based on their level of membership as outlined in their fantasy product description. For instance, Double Diamond players can buy in for $499.95 per team, with the league winner taking home $3,500 at the end of the season. This doesn’t strike me as all to different from paying $10 per team for a single fantasy game and winning up to $90 as DraftMix does. DraftMix will eventually get into the longer games as well.

Regardless, DraftMix’s short form fantasy sports model is a sure win for fantasy fans, even if they only play for virtual dollars and keep the betting offline.

New Jersey based FleaFlicker is a “new web” fantasy football alternative. It’s free (ad supported) and has an arguably richer feature set than the existing options. See the tour here. If you are looking for the best fantasy football site out there as the new season starts, check it out. There are a number of public leagues that individuals can join, or you can start your own league. One criticism – they really need to get the FAQ/Help section completed – it’s currently a blank page.

FleaFlicker was created by Ori Schwartz.

On a sports-related note, I’m hoping Italy wins today’s World Cup Finals in Berlin. I won’t be able to deal with Jeff Clavier’s extreme-French smugness if France pulls it off. (kidding, Jeff, just kidding).

Update: Oops, sorry Jeff.