Tomorrow morning, it's expected that Newsweek and The Daily Beast will announce they are merging their operations. The Observer reports, "It will be a 50-50 merger of the two companies. The editorial staffs will combine under the editorship of [The Daily Beast founder] Tina Brown, who will again run a high-profile glossy. Newsweek owner Sidney Harman, 92, and IAC chairman Barry Diller had for weeks disagreed over an operating structure for the hybrid publication. The deal reached today establishes a daily role for Mr. Harman and strong editorial independence for Ms. Brown."

A few weeks ago, Brown wrote that the Daily Beast/Newsweek "Wedding" was off, "The engagement was fun but the pre-nup got too complex," but it turns out she was bluffing. The Observer noted earlier in the day the pair of billionaire owners "have never totally broken contact, continuing to explore common ground in a series of meetings. Both Dr. Harman and Mr. Diller are strong-willed businessmen who want ultimate control of the new entity, a source familiar with their thinking said—but if either party decides to budge, a deal could gel very quickly."

Newsweek has called a staff meeting tomorrow morning, with Harman expected to speak. MediaDecoder says, "The arrangement, if it holds, is in many ways a win-win for both sides," and points out that Newsweek has been "bled by an exodus of staff members, a rapidly declining readership and a flight of advertisers" and Harman's struggles to find an editor since buying the publication for $1 earlier this year. "But the Daily Beast partnership not only solves a problem for Dr. Harman, it gives Mr. Diller a print publication, something he has said recently he believes his website needs in order to be profitable."