It is just a rumor so far but it seems to be a very well researched one:

"At today's WeMedia event Rafat Ali whispered to me to hit his blog at 8 p.m. for a big scoop and boy was he right. PaidContent.org (ahem - source them please CNET!) is reporting that Weblogs Inc. has been sold to America Online. The blog media companyfounded by Jason Calacanis and Brian Alvey, is being bought by AOL for as much as $35M, paidContent.org has learned from multiple sources. Rafat, who used to work for Calacanis in their prior lives, says the deal is done and should be announced this week."

If true congrats guys - great work!