After TechCrunch, AOL To Acquire The Huffington Post For $315 Million

Last year, AOL acquired the influential technology news blog TechCrunch for $25 million to supplement its technology coverage, which already included the blog Engadget. And now, AOL Inc has agreed to buy The Huffington Post, the highly influential and rapidly growing news, analysis and lifestyle website, for a whooping $315 million!

The Huffington Post, which started in the year 2005 with a meager $1 million investment, has grown into one of the most heavily visited news Web sites in the country. According to AOL, “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.

The two companies closed the deal this Sunday evening and announced the news just after midnight on Monday. AOL has to pay $315 million, $300 million of it in cash and the rest in stock. AOL suffered sharp declines in advertising sales and dial-up subscriptions in the fourth quarter of 2010, driving overall revenue down 26 percent. It will be the company’s largest acquisition since it was separated from Time Warner in 2009.

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’s own news Web sites like Politics Daily and Daily Finance are likely to disappear when the deal is completed, and many of the writers who work for those sites will become Huffington Post writers, according to people with knowledge of the deal, who asked not to be identified discussing plans that are still being worked out.

But one thing is for sure — With this $315-million purchase of the Huffington Post, a 5-year-old news and politics website run by political pundit Arianna Huffington, AOL Inc. is making its biggest bet yet that it can reinvent itself as a must-read source for online news, gossip and opinion.

The price that AOL is paying is “really just the hiring fee to get Arianna,” said technology analyst Rob Enderle. “This could put AOL back on the map.

The Huffington Post is the latest addition to AOL’s portfolio of dozens of websites, including the recently acquired technology news blog TechCrunch, the tech blog Engadget, the Moviefone movie listing site and the local news effort Patch. AOL is also affiliated with the gossip site TMZ.


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