AOL is buying the Huffington Post. The $315 million deal was announced just past midnight at the Super Bowl--$300 million of it will be paid in cash, the rest in stock. With the move Arianna Huffington's role in the digital news landscape expands yet more--she will oversee all editorial content in the new formation. AOL and the Huffington Post will integrate all of their content, now called the Huffington Post Media Group, and Huffington will be president and editor-in-chief.
“This is truly a merger of visions and a perfect fit for us,” said Huffington. “The Huffington Post will continue on the same path we have been on for the last six years-- though now at light speed--by combining with AOL. Our readers will still be able to come to The Huffington Post at the same URL, and find all the same content they’ve grown to love, plus a lot more-- more local, more tech, more entertainment, more finance, and lots more video."
The deal took all of three months to finalize. AOL Chairman and CEO Tim Armstrong initially emailed Huffington back in Novemeber; the two brainstormed over lunch at Huffington's home in Los Angeles and at one point early in the merging discussions, she said, "We were practically finishing each other's sentences."
So is this a union that's meant to last? Perhaps. Armstrong and Huffington share a common vision of the future of media and its challenges, and it could be argued that the two outfits complement one another well both in terms of their strengths and weaknesses. AOL has reach and a plethora of targeted sites and blogs, but it struggles with producing top-notch original content. Huffington Post, on the other hand, has the advantage of its high-profile contributors, coupled with an average of 25 million unique visitors per month, which by some counts may increase to 100 million after the merger.
Huffington had already laid out five clear goals to her team, before discussions with AOL even began: expand local sections; the launch of international sections; an emphasis on service; more video, and branded niche areas such as games, cars, and music. AOL's Patch.com, AutoBlog, AOL Latino, new video studios, and other initiatives had all begun somewhat recently, making the AOL offer that much more attractive to Huffington.
"The Huffington Post team has created a potent brand with the proven track record of knowing how to grow traffic, inform and entertain its readers and build a one-of-a-kind online community," said Kenneth Lerer, The Huffington Post's Co-Founder and Chairman. "Add that to the powerful scale and resources of AOL and you have the perfect combination for today and the future."
AOL has had its fair share of struggles--primarily with dwindling revenue streams--and the merger with the Huffington Post is set to prop up its increasingly diversified content sites, thereby raking in more traffic and more dollars.
Update, 9:34 AM: Tim Armstrong and Arianna Huffington held a conference call to talk more about the deal, and the "synergies" involved. When they were closing the deal last night, Armstrong joked, Green Bay was 31, Pittsburgh was 25, "and Huffington was 315." There was a hint, on Armstrong's side, that Huffington had driven a particularly hard bargain. Huffington chimed in to explain that "Huffington Post was not for sale. No one was in a hurry to cash out," given a recent funding round and a faith that an IPO could be feasible soon. Still, the deal was sealed--and Armstrong said on the conference call that "you will continue to see us looking at media brands and media properties."
When should we expect to see concrete changes? The whole thing should be "operationalized" in 30 to 45 days, said Armstrong. And can we be sure Huffington herself will be sticking around? She has a multi-year, open-ended contract. "I told Tim that I want to stay forever. I want this to be my last act," she said.
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