Daily Beast Editor Tina Brown, who was a top editor at Vanity Fair, the New Yorker, and the now-defunct Talk magazine, will head the new operation, The Washington Post reported.
Under the deal, Newsweek will continue to be published weekly but its Web site will be incorporated into the Daily Beast's Web site, the Post said.
Brown, a former Washington Post columnist, said the new company will give Newsweek a shot of Internet energy and help its print edition as well.
Newsweek's circulation dropped below 3 million in 2008 and its owner, The Washington Post Co., sold it in August to audio-components magnate Sidney Harmon.
"I see Newsweek and the Beast as a marriage between Newsweek's journalistic depth and the vibrant versatility the Daily Beast has realized on the Web," Brown said in a news release announcing the deal.
"The metabolism of the Daily Beast will help power the resurgence of Newsweek and Newsweek amplifies the range of talent and audience the Daily Beast can reach."
Harmon will own 50 percent of the new operation. The other half is owned by IAC Corp.
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