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AOL tries to find resurrection with Huffington Post deal


AOL Inc. announced Monday it will buy The Huffington Post for $315 million, a move that officials hope can help save the company, according to Reuters.

AOL expects Huffington Post to generate around $10 million in profit before interest and taxes, and see savings of around $20 million, meaning it would be valued at around 10 times its 2011 profits.

A similar merger with Time Warner Inc. in 2000 didn’t work out for AOL, which was once worth $163 billion and is now worth only $2.3 billion.

Huffington Post founder Arianna Huffington, well-known for her liberal political views, will lead what will be called The Huffington Post Media Group, which will integrate Huffington Post and AOL content.

The deal appears to be a large gamble for AOL, said Benchmark Co. analyst Clayton Moran in an interview with Reuters.

“AOL just spent 40 percent of their cash for very little near-term return,” he said.

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