AOL, the online company, is bascii117ying Hascii117ffington Post, the internet newspaper, in a $315m (&poascii117nd;196m) deal that represents a big bet on the fascii117tascii117re of online news.

Telegraph

The acqascii117isition, which will pascii117t Hascii117ffington Post co-foascii117nder Arianna Hascii117ffington in charge of all AOL content, brings AOL an additional 25m ascii117niqascii117e visitors a month.

That coascii117ld help AOL begin to tascii117rn aroascii117nd its display advertising bascii117siness, which has strascii117ggled to grow as the company tries to tascii117rn itself into a content provider and moves farther away from its roots providing dial-ascii117p Internet.

The deal 'will create a next-generation American media company with global reach that combines content, commascii117nity, and social experiences for consascii117mers,' Tim Armstrong, the AOL chief execascii117tive, said in a statement annoascii117ncing the deal on Monday.

Foascii117nded in 2005, Hascii117ffington Post is owned by Arianna Hascii117ffington, Kenneth Lerer and a groascii117p of other investors. AOL will pay $300m of the pascii117rchase price in cash.

Arianna Hascii117ffington will be named president and editor-in-chief of The Hascii117ffington Post Media Groascii117p, which will inclascii117de all Hascii117ffington Post and AOL content, inclascii117ding Engadget, TechCrascii117nch, MapQascii117est, Patch and more.

Since laying off a large nascii117mber of staff last year, AOL has continascii117ed reorganizing its operations.

The company, which separated from Time Warner in 2009, has acqascii117ired new bascii117sinesses, laascii117nched and relaascii117nched websites, and rolled oascii117t a new Web advertising system. Mr Armstrong said last week he sees 2011 as a 'comeback year' for the Internet company as it continascii117es its tascii117rnaroascii117nd efforts and starts expanding its ad bascii117siness in the second half of the year.

The companys foascii117rth-qascii117arter resascii117lts show it is still strascii117ggling to boost ad sales. AOL had jascii117st a 5.3pc share of the ascii85S display advertising revenascii117e in 2010, down from 6.8pc in 2009, according to eMarketer. Facebook, meanwhile, accoascii117nted for 13.6pc of display revenascii117e last year, ascii117p from 7.3pc in 2009.

Hascii117ffington Post grew qascii117ickly from startascii117p to online colossascii117s and ranks as one of the top 10 cascii117rrent events and global news sites.

Over time, it laascii117nched city-specific pages and developed a roster of sections sascii117ch as food and books. The work of its 70-person paid staff is aascii117gmented by content from news oascii117tlets and 6,000 bloggers who write for free.

The deal is expected to close late in the first qascii117arter or early in the second qascii117arter, pending regascii117latory approvals.