Tuesday, February 8, 2011

AOL bets that Ariana Huffington can rescue it from irrelevance

AOL has announced the purchase of the Huffington Post, a news website founded by Huffington in 2005. AOL’s Huffington Post purchase is one of several recent deals the company has made in a try to remain viable. Huffington is going to take over AOL’s entire stable of editorial content material, which has been criticized for emphasizing quantity over quality. It makes you wonder if AOL had to take out a personal loan to pay that price tag.

Huffington change of heart is what AOL wants

A deal with the Huffington Post/AOL could be an intelligent move. It might revive AOL. While the Huffington Post has been on the rise, AOL has turn into a fading figure in the shadow of Google and Facebook. As the AOL dial-up customer base either dies off or realizes that AOL is no longer necessary, the company has scrambled to reverse a ten-year slide. Revenue went down from ads 29 percent from 2009 to 2010 while AOL cut 2,500 jobs. There wasn't a very good search for fourth quarter earnings either. There was a 26 percent drop. The Huffington Post should be able to help AOL become profitable again. Hopefully this happens by 2013 for AOL's sake.

Huffington changes AOL writing

The liberal blog was how the Huffington Post started. A $1 million purchase was given to Ariana Huffington to start it. Now there are 200 people working for the Huffington Post. In 2010, it made $31 million in revenue. At the beginning, the Huffington Post got news from traditional outlets. That changed though. Journalists from the New York Times and Newsweek have been employed on to the Huffington though. AOL, which has built a reputation as a glorified content farm, is betting that Huffington and the Huffington Post will counter that negative image. The AOL new Huffington Post Media Group would have Huffington as the president and editor in chief. That would mean things such as TechCrunch, 5min Media and Thing Labs would be at her disposal.

Huffington snapshot

Athens, Greece, was where Ariana Stassinopoulos was born. She then went to the Cambridge University of England and got an MA in economics. She married Michael Huffington, a Bay Area oil millionaire, whom she divorced in 1997. Huffington ran as an independent candidate for governor of CA in a 2003 recall election won by Arnold Schwarzenegger. You will find 26 million visitors a month to the Huffington Post now which was started in 2005. Soon the AOL/Huffington Post deal should be closed. This spring is when it is expected to happen.

Citations

New York Times

nytimes.com/2011/02/07/business/media/07aol.html?_r=1&hp

Wall Street Journal

online.wsj.com/article/SB10001424052748704422204576130002551387710.html

CNN Money

money.cnn.com/2011/02/07/technology/aol_huffington_post.cnnw/



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