Media giant AOL has agreed to buy American internet newspaper The Huffington Post for $US315 million (£195 million).
It is seen as a bold gamble on the future of online news as the deal comes as news groups struggle to turn online news into a viable business.
AOL’s purchase, led by chief executive Tim Armstrong, who was brought in to revamp the company in 2009, shows large news organisations are still prepared to back online news with significant investment.
The Huffington Post was set up in 2005 as an exclusively online newspaper and blog. After launching versions in 2008 for cities such as Chicago and New York, it soared in popularity.
Bill Gates, President Barack Obama, Madonna and Secretary of State Hillary Clinton have all been guest writers.
The website now offers coverage of politics, business, showbiz and sport, and has nearly 25 million unique monthly visitors.
It is known for its political coverage, with a left-of-centre bent, as well as blogging about sports, entertainment and local news in selective markets.
AOL chief executive Tim Armstrong said he would be targeting wealthy women with his latest acquisition.
“The Huffington Post is core to our strategy and our 80:80:80 focus,” he told staff in an internal memo yesterday. “80% of domestic spending is done by women, 80% of commerce happens locally and 80% of considered purchases are driven by influencers.
“[It is] is a strong influencer brand and it attracts a valuable audience, including a great focus on women’s content. In addition, Arianna Huffington is a world-renowned expert on women’s topics and issues, and has enabled The Huffington Post to grow rapidly by continually developing new audiences.”
