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AOL, Huffington Post ‘Embrace the Digital Future’ Together
by
Posted On February 14, 2011
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On Monday, Feb. 7, AOL announced the acquisition of The Huffington Post (Huff Post) for a reported $315 million. AOL’s CEO, Tim Armstrong, proclaimed that “Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers.” The acquisition is intended to “create a premier global, national, local, and hyper-local content group for the digital age—leveraged across online, mobile, tablet, and video platforms.”

Wall Street analysts seem to feel this diversification by AOL into the news business represents not only a good fit between the companies but also an aid in attracting more big brand advertisers to the company.

Huff Post was founded as a private company by Arianna Huffington, Kenneth Lerer (who remains chairman), and Jonah Peretti (a former AOL executive). “We discussed creating a platform,” Huffington notes, “that would be a combination of 24/7 news and a collective blog. That was the beginning of the Huffington Post.”

Launched in May 2005, as a progressive/liberal news website and blog, Huff Post attracted a range of posts from notables—such as Arthur Schlesinger Jr., Norman Mailer, Edward Kennedy, Michael Moore, President Barak Obama, and nearly 4,000 others. In 2009, Huff Post established the Huffington Post Investigative Fund, a Washington, D.C.-based, award-winning investigative arm dedicated to “making the best use of the online environment.” Huff Post’s recent hire of Peter Goodman, formerly with the business desk of The New York Times, as executive business editor would appear to be a sign that the site intends to broaden and deepen its overall business coverage.

A Growing Empire
Huff Post co-founder and editor-in-chief, Arianna Huffington, becomes the president and editor-in-chief of the newly formed Huffington Post Media Group, which will merge all AOL and Huff Post content—including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, and StyleList. Armstrong described Arianna Huffington as a “singularly passionate and dedicated champion of innovative journalistic engagement, and a master of the art of using new media to illuminate, entertain and enhance the national conversation.”

The Poynter Institute’s Rick Edmonds believes that Huff Post has been a success in gathering news and winning an audience, but it hasn’t yet been able to turn this into revenues or profits. “I think the deal makes economic sense, as a way for AOL to gain huge audience numbers,” he explains. “It seems there may be complementary agendas. Huff Post can help pull together AOL’s loose-knit family of sites. Ms Huffington has indicated one of her next hopes was to move into local [news] in a bigger way, which matches with the Patch infrastructure.”

comScore data for the December 2009–2010 period found that Huff Post’s audience—described by AOL as “affluent, influential”—was growing at a rate of 22% and now has nearly 25 million visitors each year. In a time of news organizations floundering to find a profitable model for web-based news, the site has become a model of writers publishing their work freely online in exchange for the exposure and branding opportunities that Huff Post offers. A recent Forbes story put Huff Post’s success squarely on the shoulders of the boss lady herself: “Huffington is the face of the organization, the recruiter, the site’s best marketer, its heart and soul.”

 The Future of Journalism?
“We call the Huffington Post a newspaper,” notes Huffington. “I don’t think that newspapers are dying, I think there will be fewer of them, but there will always be newspapers.” Today, Huff Post can boast being the world’s biggest blog—with more than 26 million visitors in a single month—and offering more than 20 categories of news geared to anyone from academics to news hounds and gossipers.

Huffington has created a meteoric hit and, rather than counting her spoils, seems intent on escalating her influence and to extend Huff Post’s reach even further. Recently called “one of the most influential new-media platforms in America” by the London Telegraph, and now operating with AOL’s deep pockets, this is clearly a development to watch.

On the other hand, “It is still far from clear to me how these merged entities will make lots of money, online ad rates being what they are,” notes Edmonds. “Given what the stock price has done, Wall Street has doubts too; but Ms. Huffington has an abundance of ideas and ambitions, and I wouldn’t necessarily bet against her.”

One idea that has drawn journalistic fire is the lack of compensation for Huff Post bloggers. Dan Gillmor, director of the Knight Center for Digital Media Entrepreneurship at Arizona State, is leading professional efforts to “create a culture of innovation and risk-taking in journalism.” He thinks that the Huff Post model of not paying for content needs to change. A strong supporter of citizen-media efforts, he believes that the site should pay bloggers for their content. The Huff Post model may not provide a solution for journalists; however, others see a very different model being promoted.

“I used to count myself among those who thought Huffington would eventually need to start compensating writers beyond the ones on her 200-person staff,” notes Forbes magazine’s Jeff Bercovici. However, he now believes this isn’t inevitable or perhaps even necessary for the site’s future success. “If Huffpo’s volunteer bloggers were responsible for a significant amount of the site’s traffic, they’d have the leverage to force a change in its model. But they aren’t, so they don’t.” Bercovici contends that aggregation is key to Huff Post’s success and an open door to bloggers that allows them to get the exposure they would need to get “paying gigs elsewhere.” Huff Post’s success is less an issue of content that in employing “aggressive search engine optimization techniques” to attract readers to their aggregated content as well as giving readers “hyperactive comment boards” to involve readers in the conversations over daily events.

Whatever business model it assumes, it doesn’t seem to have a problem building its audience. According to comScore data just released, the number of unique U.S. visitors in January was gauged at 28 million, up from 24.5 million in December. In December, the site accounted for 439 million page views, which rose to nearly 500 million in January.

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Nancy K. Herther is American studies, anthropology, Asian American studies, and sociology librarian at the University of Minnesota Libraries, Twin Cities campus.

Email Nancy K. Herther
Comments Add A Comment
Posted By Bill Kaplan2/15/2011 10:24:29 AM

I suspect this is but one of the first of many successes to come for publishing entities that have learned to make the transition from print to digital. In a little more than five years, Huff Post has built a monthly audience of over 25 million that translated into a market value of over $300 million while most other magazines and newspapers have experienced huge declines.

While profits to date have still been elusive, digital media properties that target specific verticals will soon find open arms from marketers looking to reach these exclusive and valuable audiences. One fresh digital property to watch is Her Campus (www.hercampus.com), an online college women's magazine that mixes national content, written by and for college girls, with college-by-college specific content on its growing network of approximately 125 colleges.

Look for other digital media platforms to make the same play. Magazine and newspaper publishers insistent on holding onto their past business models will soon find their properties fall by the wayside. Content is still king. You just need to make it easily available on the devices your target market carries with them each and every day.

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