Online media pioneer AOL has made a deal to acquire a newer web phenomenon, the Huffington Post. With only a one million dollar investment, the Huffington Post began in 2005 as a small-time news site, and now is definitely in the big time. The Huffington Post has become one of the most frequently visited news sites on the web.

Even though the two web companies are big, they do not have much in common. The Huffington Post has a liberal point of view, and AOL has been neutral in its news and new content-generating capacities. However, AOL management no doubt sees the merger as a way to instantly grow its news power after a decade-long decline.

The deal was completed Sunday and announced early this morning. The price is $315 million, including $300 million in cash. The remainder is in stock. This is AOL's largest acquisition since 2009 when the company separated from Time Warner.

Interestingly, the editorial control of all of AOL's news output will controlled by Arianna Huffington. She will be editor in chief of a newly created Huffington Post Media Group. Huffington will oversee AOL's national, local and financial news operations, as well as the company's other media enterprises like MapQuest and Moviefone. Huffington has said that her left-leaning politics will not affect how she runs the news at AOL. 

The Huffington Post has been particularly good at using social media to connect its readers. Articles on the Huffington Post often draw thousands of comments and are cross-linked across Twitter and Facebook.

The hope of the newly combined company is that AOL's local news site, Patch, and a citizen journalist venture, Seed, will grow exponentially when paired with the Huffington Post.

There are currently political and finance sites supported by AOL, but these will probably go away, and the writers will move to the Huffington Post.

The Huffington Post estimates that it will generate $60 million in revenue this year, compared with $31 million last year.

Last year, AOL acquired the influential technology news blog TechCrunch for $25 million to supplement its technology coverage, which already included the blog Engadget.

Source: New York Times "Betting on News, AOL Is Buying The Huffington Post" 2/7/2011