Second time lucky: AOL seeks new media dominance with Huffington Post acquisition
The coolest kid on the liberal media block, Arianna Huffington, has agreed to sell her media group Huffington Post to AOL.
AOL will pay $315 million for Huffington Post, the highly respected online newspaper, in a boon for AOL chief executive Tim Armstrong. The CEO has pledged to turn AOL into ‘the most influential company in the content space’. This is a tall order from where AOL is standing at the moment, but with Huffington onboard the picture may well be starting to look different.
Fans of the Huffington Post are holding their breaths this morning, as it remains to be seen how this change will affect the popular site. The Huffington Post is known for engaging content and top-notch commentators with a political edge. Reception has so far been largely positive, however Armstrong has pledged that by March, 90% of AOL’s content will be optimised for maximum search engine hits. Hopefully he will leave Ms Huffington alone to continue doing what’s made her company so successful.
The female factor
In an internal memo sent to AOL staff yesterday, Armstrong further explains the rationale behind the deal: ‘The Huffington Post is core to our strategy and our 80:80:80 focus. 80% of domestic spending is done by women, 80% of commerce happens locally and 80% of considered purchases are driven by influencers.’ AOL wants to reach women shoppers, in other words, and Arianna Huffington understands how to do this. But Huffington is also well-respected in the broader media industry:
‘Editorial vision and leadership are essential in order to transmute our shared cacophony of voices into a valuable dialogue,’ Twitter co-founder Biz Stone commented following the announcement. ‘Arianna’s expertise, empathy, and entrepreneurial enthusiasm forms a kind of alchemy, turning mere words and phrases into powerful expressions of humanity.”
‘So thrilled to announce that today @HuffingtonPost joins forces with @AOL … Same HuffPost team, same goal … but now at lightning speed,’ Huffington tweeted as the news broke. Huffington, who launched her site in May 2005, will remain editor in chief of the Huffington Post, as well as AOL’s other editorial assets including Engadget, TechCrunch, Moviefone and Politics Daily.
Second time lucky?
AOL expects to close the deal in the late first- or early second-quarter of 2011. The Huffington Post has nearly 25 million unique monthly visitors, meaning AOL expects the combined group will 270 million people globally.
AOL’s merger with Time Warner was hailed as a media ‘coming of age’ story when it took place in 200, seeing internet hotshot AOL join forces with media empire Time Warner in a whopping $350 billion deal. Time Warner’s CEO at the time, Gerald Levin, said the internet ‘creates unprecedented and instantaneous access to every form of media and to unleash immense possibilities for economic growth, human understanding and creative expression’.
Levin might have been right about that, but it didn’t mean the joining of experts in new and old technology was enough to figure out how to successfully blend the two and dominate the brave world of new media. The deal is now being taught in business schools as a failure.
Now AOL is again using big words to describe its latest move, hailing the acquisition of the Huffington Post as ‘a seminal moment in the evolution of digital journalism and online engagement’. Let’s hope AOL has better luck this time, and that Arianna Huffington is right to be optimistic that the tie-up will bring ‘lightning speed’ to her company. Anything else would be a real shame.