AOL to Acquire HuffPo; Arianna will Run AOL Content Empire
AOL CEO Tim Armstrong and Arianna Huffington discuss the deal
As part of the deal, Arianna Huffington will become Editor-in-Chief for all properties of AOL's rapidly expanding content empire, including the increasingly ubiquitous Patch.com hyperlocal news network. Top sites that will be added to Huffington's editorial domain include TechCrunch, Mapquest, Moviefone and the surviving blogs of the Weblogs, Inc. network (including Endgadget, TV Squad, PopEater and Joystiq), acquired by AOL/Time Warner in 2005.
Launched in 2005 on an investment of $1 million from Huffington and venture capitalist Ken Lerer, HuffingtonPost.com has grown into one of the most popular destinations on the web, claiming 25 million unique monthly visitors. Over the years, HuffPo's venture capital investment has grown to $37 million, easily eclipsed by the $315 million (including $300 million in cash) that will be received from AOL in the deal.
Huffington Post had revenues of $31 million in 2010 and is aiming to triple that by 2012. But can it maintain the same margins as part of AOL?
Will its hundreds of unpaid bloggers - comprised mostly of media, business, and entertainment celebrities as well as political progressives - continue to volunteer their services after hundreds of millions of dollars have passed before their eyes?
In spite of its best efforts to brand itself as a news site for the politically left-of-center, it won't be a shift at all to see Huffington Post's most popular content include the same smut and gossip that has arguably ruined the news in recent years. As is its all-time most viewed post leaderboard stands today, it looks as though AOL just paid big money for another source of Palin bikini pics, Michael Phelps bong hit videos and profiles of "Cougars and MILFs."
“I think this is going to be a situation where 1 plus 1 equals 11,” said AOL CEO Tim Armstrong, befuddling AOL co-founder and former CEO Steve Case among others. We can't wait to get our hands on his calculator.