Cambridge, MA-based StyleFeeder raised $3.5 million in financing from Highland Capital Partners and investment firm Schooner Capital.

Time is reportedly looking to integrate StyleFeeder throughout its Web properties, in order to complement the declining advertising revenue with e-commerce income. StyleFeeder is expected to be interwoven with fashion magazine InStyle’s website, and eventually also be closely aligned with other titles like Essence and People en Español.

The WSJ said an official announcement of the acquisition could come Tuesday.

Update: the official word just came in:

Time Inc. announced today that it has acquired StyleFeeder, a personal shopping engine that uses pattern recognition technology and its members’ style preferences to make recommendations for clothing, shoes and accessories from thousands of online retailers. StyleFeeder will become part of the InStyle family of brands and its e-commerce technology will power shopping on InStyle.com.

A couple of interesting nuggets in the press release as well: StyleFeeder apparently attracted more than 1 million registered members over the past few years and gets visited by over 600,000 unique visitors per month according to comScore. InStyle.com has 1.5 million monthly unique visitors, still according to comScore, and over 1.5 million followers on Twitter.

Finally, StyleFeeder aggregates content from a catalog of over 14 million products today, from thousands of retail partners across the web.

The deal is a big win for Glam’s advertising network, with StyleFeeder bringing an additional 1.5 million page views (comScore) to Glam but more importantly over 1 million Facebook users (StyleFeeder claims to be the biggest shopping application on Facebook).

The deal with Shopping.com sees StyleFeeder adding comparison pricing to its personalized shopping engine, providing more of a one stop shop for users.

See our previous coverage here.

The API includes access into StyleFeeder’s personalized search engine, bookmarking tools, item recommendations, watchlist, “StyleFeed”, “StyleTwins” and other features.

The site was acquired by Top 10 Sources in 2006 (the last time we wrote about it) and took $2 million Series A from Highland Capital Partners and Schooner Ventures in January 2008. StyleFeeder claims to be the largest shopping application on Facebook with over 1 million users.