AOL's purchase of the Huffington Post for $315 million is fascinating. It comes directly on the heels, for one thing, of a Goldman Sachs assessment issued last week, with a "neutral" rating and the headline "still waiting for the promised turnaround." (It notes that AOL's ad revenue was down 27% and 29% from the previous year in quarters three and four.) You spoke a little soon, Goldman Sachs! Now AOL has inventory to sell! And HuffPo has content from elsewhere to suck in to sell against! What a morning—Arianna Huffington and AOL honcho Tim Armstrong are touching each other! AOL's publicist and Arianna's publicist are integrating! Let's look deeper!
First, the money! Huffpo took in $30 million in 2010, give or take, with 203 employees. They expect to make $60 million in 2011. (Outside investment in the company to date has been $37 million.) Meanwhile? AOL's local news network-thing, Patch, is going to cost AOL $160 million in 2011.
For comparison to some other media organizations?
What's rather shocking is that the New York Times said of this purchase that AOL is "betting on news." Why an actual news-gathering organization thinks that is bizarre. They have confused content with news.
Arianna Huffington: editor in chief! She is supposedly "moving to New York," and will be the honcho of the "Huffington News Group." This, among other things, makes her the boss of Michael Arrington at Techcrunch and Joshua
FruhlingerTopolsky [Ed Note: LOL! Crazy morning, crazy name substitution!] at Engadget—as well as of Black Voices, Mapquest and Moviephone!
Right? It's a rich new world for intrepid media reporters.
The second big media merger in recent months, after the wild mating of The Daily Beast with Newsweek, this precedes an expected and very strange forthcoming merger, we hear rumors, between one long-time (and long-suffering) large website with an unlikely new owner. This unbridled content-world mergermania will most likely strengthen the new companies—except in the cases where one party becomes a giant stone around another's neck. (A potential outcome for The Daily Beast with Newsweek, sure! Far less so than for HuffOL. AOLHuff. I don't know—please work on that.) On a smaller level, one that we care about: all these mergers will most likely put a fair number of people out of work. Oh well, brave new world.
That is a true thing.
We'll give our own publisher the last word.