UPDATE 1-AOL to buy Weblogs Inc. network for $25 mln-source

America Online Inc. has agreed to buy Weblogs Inc., a network of Internet sites focused on niche topics ranging from food to gadgets, for around $25 million, a source familiar with the deal said on Wednesday.AOL, a unit of Time Warner Inc. (TWX.N: Quote, Profile, Research), could announce the acquisition of New York-based Weblogs Inc. (http://www.weblogsinc.com//) as early as Thursday, the source said.
A spokesman for America Online declined to comment.
Executives at Weblogs were unavailable to comment. The personal blog of Weblogs founder and Chief Executive Jason Calacanis said he was flying from New York to a San Francisco Web conference on Wednesday evening.
Weblogs Inc. includes roughly 80 advertising-supported sites published by a group of more than 100 bloggers.
Examples include Autoblog, BloggingBaby and Engadget, Weblog Inc.’s busiest site, which is aimed at “rabid gadget freaks.”
David Sifry, chief executive of tracking site Technorati, said Calacanis has figured out a business model that is attractive to advertisers and allows bloggers to be be paid.
“He did a great job of forming a network of topics of high interest to advertisers — from babies to gadgets to luxury goods,” he said.
America Online is attracted to Weblogs by the advertising opportunities created by adding the 80 sites to AOL’s existing network of Internet properties, the source said.
The company is looking to offset a decline of millions of subscribers for its dial-up Internet service by boosting online advertising revenue.