AOL has agreed to buy The Huffington Post for $315 million in a move that will create a media group with a combined base of 117 million visitors a month in the US.
The deal follows efforts by AOL's chief executive Tim Armstrong to turn it into a media and entertainment powerhouse.
AOL suffered sharp declines in advertising sales and dial-up subscriptions in the fourth quarter of 2010, driving overall revenue down 26 per cent.
Arianna Huffington, co-founder of The Huffington Post, said on her blog that she would lead a newly formed the group, which will integrate all Huffington Post and AOL content, as its president and editor-in-chief.
AOL said the acquisition would accelerate its strategy to deliver an array of premium news, analysis and entertainment.
The Huffington Post, which started in 2005, has grown into one of the most heavily visited news websites in the US.
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.
