Newsweek and Daily Beast will merge after all

Well, at least according to the NY Observer, which reports that the announcement will be made tomorrow morning. Under the deal, the editorial staffs will combine under Tina Brown.

As The Observer reported earlier today, talks between Mr. Harman and Mr. Diller never completely broke down, as the media world thought for weeks. The two men continued to meet and inched toward a deal. Tonight, they are hammering out a couple of sticking points, and will announce the new business tomorrow. What will the new entity be called? For now, Newsweek will be called Newsweek and The Daily Beast will be called The Daily Beast, with some intermingling of the names to come later.