AOL Buys Huffington Post in $315 Million Deal

Updated at 8:27 a.m. on February 7.

AOL's expansion into the news world continued today with its acquisition of The Huffington Post - and its 25 million monthly visitors - in a $315 million deal, the company's largest since it severed ties with Time Warner in 2009.

AOL CEO Tim Armstrong said in a statement announcing the deal that their combined forces "will create a next-generation American media company" that "will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers."

Armstrong has been trying to brand AOL as a go-to news destination since he assumed his post in January 2009. It launched Patch.com, a hyperlocal news service in 800 towns across the country with a planned expansion of at least 200 more by the end of the year. The company also owns news websites Politics Daily and Daily Finance, plus technology websites Endgadget and TechCrunch, mapping service MapQuest and others.

Despite Armstrong's efforts to reinvent the floundering former Internet giant, the company lost $782.5 million last year, mostly due to accounting charges. Its stock is valued at slightly less now than when the Time Warner-AOL relationship was severed in December 2009. By contrast, Huffington Post made $31 million in revenue last year and is expected to generate $60 million this year, according to company executives who spoke with The New York Times.

Armstrong had nothing but praise for Huffington Post co-founder and Editor-in-Chief Arianna Huffington, who will become the new president and editor-in-chief of The Huffington Post Media Group. "Arianna is a singularly passionate and dedicated champion of innovative journalistic engagement, and a master of the art of using new media to illuminate, entertain and enhance the national conversation," Armstrong said. "Arianna is a remarkable person and she will continue to create remarkable outcomes for the combined company."

Huffington, in turn, assured the public in the statement that her news and opinion site will not change course. "Our readers will still be able to come to The Huffington Post at the same URL, and find all the same content they've grown to love, plus a lot more - more local, more tech, more entertainment, more finance, and lots more video," she said.