AOL to buy The Huffington Post for $315 million

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.