|Arianna Huffington will be the president and editor-in-chief of the new media group [GALLO/GETTY]
AOL Inc. is purchasing The Huffington Post, the highly-trafficked and rapidly growing news, analysis and lifestyle website, for $315m, the US Internet company announced.
The move will create a media group that will have a combined base of 117 million visitors a month in the United States, and reach 270 million people globally, AOL said in a statement on Monday.
Arianna Huffington, co-founder and editor-in-chief of The Huffington Post, will lead a newly formed The Huffington Post Media Group, which will integrate all Huffington Post and AOL content.
AOL will pay $300m of the $315m purchase price in cash in a deal that has been approved by the boards of directors of both companies and shareholders of The Huffington Post, the statement said.
The deal will combine AOL's infrastructure and scale with The Huffington Post's pioneering approach to news and innovative community building, AOL said.
It could help AOL begin to turn around its display advertising business, which has struggled to grow as the company tries to turn itself into a content provider and moves farther away from its roots providing dial-up Internet.
The company's fourth-quarter results show it is still struggling to boost ad sales. AOL had just a 5.3 per cent share of the US display advertising revenue in 2010, down from 6.8 per cent in 2009, according to eMarketer.
Facebook, meanwhile, accounted for 13.6 per cent of display revenue last year, up from 7.3 per cent in 2009.
'Next generation' media company
"The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers," said Tim Armstrong, chairman and CEO of AOL.
"Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers," he said.
AOL said the acquisition will accelerate its strategy to deliver an array of premium news, analysis and entertainment.
Since laying off a large number of staff last year, AOL has continued reorganising its operations.
The company, which separated from Time Warner in 2009, has acquired new businesses, launched and relaunched websites, and rolled out a new web advertising system.
AOL's Armstrong said last week he sees 2011 as a "comeback year" for the Internet company.
"By uniting AOL and The Huffington Post, we are creating one of the largest destinations for smart content and community on the Internet," Kenneth Lerer, The Huffington Post's co-founder and chairman said.
The Huffington Post, which began in 2005, has grown into one of the most heavily visited news web sites in the US.
It grew quickly from startup to online colossus and ranks as one of the top 10 current events and global news sites.
Over time, it launched city-specific pages and developed a host of sections such as food and books.
The work of its 70-person paid staff is augmented by content from news outlets and 6,000 bloggers who write for free.
The deal is expected to close late in the first quarter or early in the second quarter, pending regulatory approvals.