Online company AOL Inc. is buying highly-trafficked website Huffington Post in a $315 million deal that represents a big bet on the future of online news.
The acquisition, which will put Huffington Post co-founder Arianna Huffington in charge of all AOL content, brings AOL an additional 25 million unique visitors a day.
That 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 deal "will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers," AOL CEO Tim Armstrong said in a statement announcing the deal early Monday.
Founded in 2005, Huffington Post is owned by Arianna Huffington, Kenneth Lerer and a group of other investors. AOL will pay $300 million of the purchase price in cash.
Arianna Huffington will be named president and editor-in-chief of The Huffington Post Media Group, which will include all Huffington Post and AOL content, including Engadget, TechCrunch, MapQuest, Patch and more.
Since laying off a large number of staff last year, AOL has continued reorganizing 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 CEO Tim Armstrong said last week he sees 2011 as a "comeback year" for the Internet company as it continues its turnaround efforts and starts expanding its ad business in the second half of the year.
The company's fourth-quarter results show it is still struggling to boost ad sales. AOL had just a 5.3 percent share of the U.S. display advertising revenue in 2010, down from 6.8 percent in 2009, according to eMarketer. Facebook, meanwhile, accounted for 13.6 percent of display revenue last year, up from 7.3 percent in 2009.
Huffington Post 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 roster 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.