AOL is handing over operations of its troubled local-news business, Patch.
The Internet company has created a joint venture with investment firm Hale Global, which specializes in turning companies around, to run Patch.
Under the agreement announced Wednesday, Patch will be operated and majority owned by Hale Global. AOL will keep a minority interest in Patch.
AOL Inc. CEO Tim Armstrong co-founded Patch, an ambitious experiment in local news meant to compete with newspapers, in 2007. AOL bought it in 2009 after Armstrong came on board.
But the division ran into problems, and was a financial drag on AOL. The New York-based company said last year that it would lay off half of Patch's staff to cut the division's losses. It took a $25 million charge on Patch in its most recent quarter.
AOL and Hale Global said they are committed to re-launching Patch as a platform for users to share local news and content.
The companies anticipate closing the joint venture deal early in the first quarter. Financial terms of the transaction were not disclosed.
Shares of AOL added 2.1 percent to $48.25 in after-hours trading. Its stock fell 60 cents to close regular trading at $47.25.
© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.