The left-leaning news site cashed out in a $315 million sale to corporate behemoth AOL—but will the odd couple work? Howard Kurtz on how the deal could echo AOL’s Time Warner merger. Plus,
Randall Lane on the cash-heavy transaction,
Dan Lyons on why the deal’s a disaster, and
more details on the sale.
The purchase of The Huffington Post will mean an enhanced role in the digital media empire for the woman who has moved from the conservative wife of a congressman to a quirky candidate for California governor to an entrepreneur enamored of liberal causes. It will provide a highly visible spokeswoman for what was once known as America Online, a giant in the dial-up days of the Internet that has struggled ever since its disastrous merger with Time Warner.
But more than that, it is one more chunk of evidence that online news and entertainment are an increasingly valuable force in a media world once dominated by old-guard newspapers, magazines, and networks. The merger of The Daily Beast and Newsweek, completed last week, was another such sign, along with AOL’s recent acquisition of the popular blog TechCrunch.
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While The Huffington Post has greatly expanded its platform since its 2005 launch—to include food, technology, divorce, colleges, and local editions in a handful of cities—its sensibility has a left-leaning aura, befitting its start as a way to help Democrats compete in the message wars after John Kerry’s election loss. AOL, by contrast, has always exhibited a cautious corporate culture with no particular ideology beyond trying to make money.
The New York Times, which broke the story early Monday, wrote Huffington will take control of all of AOL’s editorial content, which includes such enterprises as Politics Daily, Mapquest, Moviefone, and Patch, the hyperlocal news sites.
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• Details on the DealWhen she and her partner Ken Lerer started the venture, Huffington said today in a post on her site, “we would have been hard-pressed to imagine this moment. The Huffington Post has already been growing at a prodigious rate. But my New Year's resolution for 2011 was to take HuffPost to the next level—not just incrementally, but exponentially.”
Tim Armstrong, AOL’s chief executive, told the Times: “This is a statement that the company is making investments, and in this case a bold investment, that fits right into our strategy.”
Armstrong initiated the talks last month by sending Huffington an e-mail asking if they could meet. He broached the purchase over lunch at her Brentwood mansion in Los Angeles.
Tim Armstrong, AOL’s chief executive, said: “This is a statement that the company is making investments, and in this case a bold investment, that fits right into our strategy.”
By combining politics, culture and links to gossip and photos of scantily-clad women, Huffington and her team have built an online powerhouse with more than 25 million unique monthly visitors, according to one measure, which is competitive with the Times and greater than any other American newspaper. But the site has drawn criticism over the years because most of its bloggers and contributors are paid only with exposure, not dollars.
While it was known in its early years for aggregating content from just about everywhere, Huffington has recently assembled a stable of prominent journalists to generate original reporting and writing. They include Howard Fineman, formerly of Newsweek; economics writer Peter Goodman from the New York Times, and Tim O’Brien, who had been the paper’s Sunday business editor.
AOL’s resources could help Huffington expand the product even further, though as Time’s journalistic properties learned after the Time Warner deal, being absorbed by a mega-corporation can be a mixed blessing.
Howard Kurtz is The Daily Beast's Washington bureau chief. He also hosts CNN's weekly media program Reliable Sources on Sundays at 11 a.m. ET. The longtime media reporter and columnist for The Washington Post, Kurtz is the author of five books.