AOL Inc has agreed to buy The Huffington Post, the influential and rapidly growing news, analysis and lifestyle website, for $315 million, the struggling U.S. Internet company announced on Monday.
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.
The deal follows efforts by AOL's chief executive Tim Armstrong to turn around the dial-up Internet access business by trying to turn it into a media and entertainment powerhouse, despite difficulties in attracting investors.
AOL suffered sharp declines in advertising sales and dial-up subscriptions in the fourth quarter of 2010, driving overall revenue down 26 percent.
Arianna Huffington, co-founder of The Huffington Post, said on her blog that she would lead a newly formed The Huffington Post Media Group, which will integrate all Huffington Post and AOL content, as its president and editor-in-chief.
"By combining HuffPost with AOL's network of sites, thriving video initiative, local focus and international reach, we know we'll be creating a company that can have an enormous impact, reaching a global audience on every imaginable platform," she said.
Approximately $300 million will be paid in cash in the purchase, which has been approved by the boards of directors of both companies and shareholders of The Huffington Post, though it still needs government approvals, AOL said.
The deal, expected to be closed in the late first, or early second quarter of 2011, will combine AOL's infrastructure and scale with The Huffington Post's pioneering approach to news and innovative community building, AOL said.
"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," Armstrong said in the statement.
AOL said the acquisition would accelerate its strategy to deliver an array of premium news, analysis and entertainment.
The Huffington Post, started in 2005, has grown into one of the most heavily visited news websites in the United States.
"The Huffington Post has already been growing at a prodigious rate. But my New Year's resolution for 2011 was to take HuffPost to the next level -- not just incrementally, but exponentially," Huffington said in her blog.
She said the Huffington Post decided early this year to expand into more local news coverage, launch international sections (starting with HuffPost Brazil) and increase original video content.
Purchase by AOL, with its network of blogs such as AutoBlog, Music, AOL Latino, Black Voices, its local news operation Patch.com and new video-production studios, will allow these goals to be met, she said "Far from changing our editorial approach, our culture, or our mission, this moment will be for HuffPost like stepping off a fast-moving train and onto a supersonic jet," she said.
"We're still traveling toward the same destination, with the same people at the wheel, and with the same goals, but we're now going to get there much, much faster."