AriannaOL

They laughed when Arianna sat down to the keyboard. They were wrong. I was wrong, too. I hadn’t imagined that Huffington Post would become the force in media and politics that it became.

Tim Armstrong and Aol are smart to acquire Huffington Post as a media property and Arianna Huffington as the head of content.

I was just thinking yesterday that though Aol has lots of content and plans to make a lot more, I never think to go there, apart from heading to one of its brands, such as Engadget. Portals are burned toast. Making content for search is not, I believe, a growth strategy, as the more Google becomes personalized and successfully seeks out signals of quality and originality, the more SEO will die as a black art. So to execute on its content-and-advertising strategy, Aol needs brands with engagement. Huffington Post is that. Armstrong needs someone who understands that the critical sphere of discovery for content will more and more be people: peers links, not algorithms; Arianna gets that. The company was bought at a high multiple to its revenue but I think the price is not insane. Armstrong didn’t buy pageviews (how 2005); he bought a content and distribution strategy.

The only thing that makes me nervous is hearing Arianna talk with Kara Swisher about the center. No, Arianna, don’t heed the siren call of the view from nowhere! But I can’t believe that’s possible for her. Arianna’s not going to be buying Glenn Beck. Arianna must be Arianna.

One wonders why big, old media companies didn’t buy Huffington Post. The better question is why they never started their own HuffPos. Only one did: The Guardian. When it saw HuffPo, I remember, its response was, ‘shit, we should have done that.’ So they did, starting Comment is Free as a vehicle to change its relationship with the public (more than as a business strategy). The New York Times or Washington Post are still too tied to their views of themselves as the founts of all fonts; as far as they may have come, the HuffPo model remains a populist leap too far. TV is wrapped up in its makeup. I tried to convince many publishers in Germany that they should start HuffPo and not one bit.

So who could have bought and invested in the growth of Aol? Yahoo? Thank God Arianna avoided that black hole of online death. Google, Facebook, Twitter, et al all see themselves as platforms for others’ content, not content themselves. No, Aol and Armstrong were stubbornly going their own way with a content strategy and that’s what made HuffPo an ideal acquisition. Who else could Aol have bought? Gawker Media? No, as friend and professional contrarian Nick Denton keeps insisting, he’s not a blog; he’s not a blogger but a content maker.

Content alone isn’t enough for Aol. It has content. Lots. What HuffPo and Arianna bring is a new cultural understanding of media that is built around the value of curation, the power of peers, the link economy, passion as an asset, and celebrity as a currency. As a friend of mine reminds me via email from London, HuffPo, thanks to its roots, also has a keen understanding of the value of technology innovation to build platforms. Unlike old media companies, HuffPo groks scale.

And let’s not forget that HuffPo gets journalism. I remember a few years ago when Alan Rusbridger, editor-in-chief of the Guardian, goaded Arianna in a talk before his staff about why she’d possibly want such as them: reporters who cost a lot and are pains to work with. Because their stories get more traffic, Arianna replied. She understands the value of reporting.

On Twitter just now, Jim Schachter of the NY Times (I work with him on the Local via CUNY, so we are brothers in hyperlocal) was wondering what Arianna’s ascension means for Aol’s soon-to-be 1,000-suburb-strong Patch. I think she can get them to add more human voice to it and think about aggregating regional and city-wide issues across them. Arianna has long thirsted after local and Patch gives her the scale to execute her imperialist strategy.

If this acquisition works, it will be because Arianna really is the boss of content and gets to scale her vision and because Aol brings its key strengths–ad sales and capital–to what comes next.

I’ll be eager to see what does come next.

* DISCLOSURE: I forget that I am listed as an advisor to Patch on its site. That should be taken at face value. I have no personal business relationship with Patch. I was asked to join its advisory board but because I have so many fingers in so many hyperlocal pies, I said that I’d be happy to chat with them but not be a compensated advisor. We meet now and again and work together via CUNY’s J-School on Patch in Brooklyn.

* MORE: The free-content thing…. I see snark passing on Twitter and heard some flak from a few Brits regarding what they see as HuffPo’s free-content problem: It doesn’t pay its writers. Well, neither does my blog but I do it anyway. Why? Because there are other values than payment from an employer (who often takes too much control in return). I write on this blog because I get attention, links, ideas, answers, criticism, an outlet. I crosspost on HuffPo — she this post there (how meta can you get?) — because I get more attention from a wider audience.

In the link economy, there are two creations of value and two opportunities to make use of that value: the creation of the content and the creation of the audience for it, via links. HuffPo brings me links to people and for me, it’s worth it to post there. No one — not even the quite persuasive Arianna — is forcing me. I do it out of my self-interest. Huffington Post was smart enough to build a business, a scalable and efficient business, out of that self-interest.

To think that content must be something that is created only by content companies that pay content people to create it is, like or not, outmoded. Content is no longer scarce, people. It is abundant. Google understands that. Twitter understands that. Huffington Post understands that. Sadly, old content people from old content companies still do not. Therein lies a lesson in this acquisition.

  • http://www.ukfree.tv Briantist

    The question now is, is this a My Space moment? Will corporate ownership kill the golden-egg laying goose?

    • http://www.buzzmachine.com Jeff Jarvis

      Oh, if they’re not careful, that’s always the risk.

      • http://www.ukfree.tv Briantist

        I would suggest that some of the $315 million might like to find it’s way towards the “free content”, or the next time people start to write for free there’s going to be a feeling of what you might term “virtual slavery”.

        To quote Grandmaster Flash, “Can’t you see baby, We don’t work for free”.

  • http://inkthink.org Daniel Bentley

    I don’t follow Jeff. In what way is the Guardian’s CIF similar to HuffPo?

    • http://www.buzzmachine.com Jeff Jarvis

      In what way isn’t it similar?

      • http://inkthink.org Daniel Bentley

        Comment is Free is a platform for user-generated comment and opinion.

        HuffPo is a news aggregator with a blog platform as a small arm.

  • http://rconversation.blogs.com Rebecca MacKinnon

    Merging with AOL nearly killed CNN.

    • steve

      i think cnn is doing a great job of killing itself now that aol is gone.

      the cbc had wilf dinnick on last night’s ‘the national’ who absolutely ripped ac for making himself part of the egypt story.

      too bad american media feels a need to make itself the story.

  • http://www.shanebrady.com Shane P. Brady

    For all HuffPo’s skill with technology, I’m pretty sick of them promoting the anti-vax movement by allowing such scientifically fallacious nonsense on their website.

    • http://buzzmachine.com/ Michelle Bolin

      The deceit and serious harm perpetrated by the writers on HuffPo who continue to promote anti-vaccination propaganda brings shame to HP and to Huffington herself.

      This situation could possibly get worse under AOL.

      First, it’s highly unlikely that AOL-HP is going to pay writers. So writers will still contribute content for free in the new regime. This allows all manner of charlatanry to continue unabated.

      Second, there will be increased pressure by AOL to increase the volume generated at their content mills, which will encourage the amount of deceitful propaganda to increase.

      Third, the expanded cross-promotional efforts that will now run viral in the larger AOL-HP universe will allow these disreputable opinions to be seen by an even larger audience.

  • http://www.telegraph.co.uk Edward Roussel

    Five lessons Old Media company can learn from Huffington Post:

    1. CURATION of content is as important as its creation. HP editors spend half their time figuring out what stories to run and editing text, and the other half of their time adding value to those stories by embedding pictures and video, commissioning blogs, stimulating debate. There is some original reporting, too, particularly politics. But this is the icing on the cake. Old Media Journalists tend to overrate the value of content they bring to the world and underrate how much value can be added with curation.

    2. LINKS: A key part of HP curation is selecting additional perspectives on a story by linking to the best of the rest – i.e. competitors. Different perspectives enrich the mix. Too many newspaper journalists still suffer from “not invented here” syndrome.

    3. SOCIAL media is conversation in contrast to the one-way “lectures” of columnists. HP is the most “social” news website in the U.S. with more than 3.5 million comments a month and more than 200 daily blog posts. HP’s leadership in social media has helped make money, too, persuading premium advertisers, such as IBM, to work with HP on lucrative sponsored sections.

    4. TECH developers work side-by-side with journalists at HP. Most of the initiatives result from the bottom up. Development is continuous; HP avoids the Old Media trap of bulky, occasional releases.

    5. MOBILE: HP is truly platform agnostic, meaning you get the same experience on web, iPad, mobile. This has the merit of simplicity: It’s clear what the product/brand stands for. Simple is good. Old Media tends to over-complicate and over-spend.

  • http://www.twitter.com/javaun Javaun Moradi

    Arianna deserves congratulations on her $315 million exit, $300 million of which is cash.

    That said, this is yet another bad deal for AOL. HuffPo is private, so none of us have seen their books, but I think it’s generous to say that Huffpo is at best a $30 million company. As far as I know, they’ve never turned a profit according to GAAP. Their audience is huge but I’d like to see the breakdowns by return vs. 1 time visitor and also for original content vs. aggregation, and specifically I’d like to see what percentage of traffic goes to soft-porn photo galleries. I’ve seen unique visitor estimates up to 40 million/month, but the more conservative estimates put them at 20-25 million. Even if they’re seeing 100 million+ pageviews per month, monetize that by ads and you’ll see that their revenue isn’t that significant.

    They’ve shown that you can generate a huge amount of traffic by SEO and social media, and they do it better than anyone. They also have a very low overhead with a lean newsroom, a lot of unpaid contributors, and aggregation by technology. Even with that low cost structure, the ad model isn’t generating huge profits for the, and if they can’t do it, who can? The point I routinely make is that the web ad impression model will never be enough to sustain a news site.

    In other words, they’re in the same boat as every other media organization in that they lack a business model that works. But they may also have less options going forward. They probably can’t put up a subscriber paywall or create a paid premium iPad app, since a lot of their photos and text are excerpted from other sources and they rely on “fair use”.

    The best thing HuffPo has going for them is an active audience. In many ways, they’re more of a social network around news than they are a news outlet.

    Again, I’m happy for the staff of the Huffington Post, and I welcome success stories in this bleak media climate. But the math has never worked for me, nor has the idea that sites can make it on aggregation, lean staffs, and ad impressions alone. What am I missing? Please tell me I’m wrong.

    • http://buzzmachine.com/ Michelle Bolin

      You’re certainly not wrong.

      HP relies greatly on unpaid content.

      It cannot change that to paid content or else its margins (which may just be barely black now) would certainly turn to red.

      Yet now that it’s well known that Arianna picked up $300 million in cash on the backs of all of these unpaid writers, they will be less interested in continuing to give away their work for free.

      The math doesn’t work. And the acquisition of HP by AOL simply validates that.

      AOL, in their merger with Time-Warner, made one of the worst-executed, and worst-performing deals in American business history. The genetics of AOL doesn’t give them the intellectual capacity to do a good deal.

      • Steven c

        The old genetics of aol are gone. Aol was run by time warner idiots who had no clue. This is the new guard, and they actually get it. The past doesn’t have to dictate the future.

        I am posting this for free.

  • http://www.twitter.com/javaun Javaun Moradi

    I meant to add: even if this is a good fit for AOL and a good acquisition by the numbers, I’m not optimistic that AOL will be able to integrate it under their umbrella. HuffPo + Patch is good in theory, but my gut says that AOL runs Huffington Post into the ground.

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  • LOL

    Great day for Arianna.

    Bad day for the countless unpaid contributors who made HuffPo what it is today.

    Also bad day for AOL shareholders, at 10x revenues, the valuation is beyond reasonable.

  • http://www.deborahemin.com Deborah Emin

    As a former blogger for Huffington Post, I have to say that one quickly tires of the way bloggers are treated there. Since there is no monetary reason for writing for them and since they assume you are just there to hawk your own self onto some other platform, they have no compunctions about how they use the work.

    Yet seeing one’s work side by side with the outrageous soft porn Hollywood mess is so unnerving that I left. Quickly and forever. No regrets.

    I did write a post for them that landed me a job with the Kucinich campaign. I did benefit greatly in that way. The Kucinich people couldn’t understand why none of their ideas were taken seriously by the Huffington Post. I pointed out that Obama’s campaign ran banner ads every single day on the site.

    Follow the money is a wonderful slogan.

    I did write a blog post today about this merger:
    http://www.deborahemin.com/opinions/where-is-the-rage/

    • Steven c

      So you just justified why bloggers work for free. There is an arse for every seat, and they will always be good writers willing to post. Get over it, content is cheap and you are not any more talented than the next person.

      If you knew aols vision you would see how this works.

      Stop being so self absorbed.

  • oh, rlly

    Are you seriously implying that Huffington Post is about “quality and original” content, not SEO dark arts! They are easily among the most successful and aggressive SEO content mills on the web! They also are one of the most famous aggregators of other people’s content! You’ve got it so backwards it’s baffling.

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  • Rob

    I echo what “LOL” says :

    “Great day for Arianna.
    Bad day for the countless unpaid contributors who made HuffPo what it is today.”

    What is an online news source aggregator if it is not content? If one does not find the journalism and articles interesting, there is no reason to visit a site at all (aside from maybe the teen success stories and swimsuit photos). It’s like a supermarket – one goes there because one is sure that one will find what one is looking for because of the vast amount and variety of products. If most of the products are inferior, however, there is no reason to go there. Am I missing something?

  • http://www.twitter.com/javaun Javaun Moradi

    Re-reading this: “Armstrong didn’t buy pageviews (how 2005); he bought a content and distribution strategy. ”

    I disagree. I think AOL absolutely bought page views. Tim Armstrong may try to convince himself that he’s paying for a content/distribution strategy, but his justification for doing the deal are based on projected ad impressions, which rolls up to PVs. (And I’d argue that page view deals are not a 2005 phenomenon but rather 1998′s “eyeballs” by another name.)

    HuffPo has a good team and some good technology, but none of that is worth $300 million either. Armstrong bought a social network that he believes can generate page views.

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  • http://www.danhaugen.com Dan Haugen

    What could this mean for Patch? My illustration: http://www.danhaugen.com/2011/02/07/huffington-patch/

  • Stan Hogan

    AOL sure seems foolish on the face of it. Whether Huffington Post has ever actually turned a profit is a subject of great debate.

    Patch is setting up as a money-wasting disaster.

    HuffPo was flying to a great extent on the ideals of its contributors. With corporate ownership and more media companies shutting off to the aggregators I see no financial end game.

    Arianna may make a pile of money off this deal but it makes no business sense for anyone else.

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  • weezmgk

    AOL bought Netscape for $4.2bn and was never heard from again. RIP HuffPo.

    Mind you, as regards Arianna’s attachment to pseudoscience and vaccination scaremongering, perhaps AOL will rename the venue ‘Huffington Pest’ and be done with it.

  • http://twitter.com/hammertime sophie hammer lewis

    I understand that there must be content created for free – yet at what point can people make a living. Must we all become journalism professors rather than journalists?

  • DB

    HuffPo certainly is successful, but I don’t think much of it and rarely visit it. Aside from some good, solid news (most of which has a partisan slant), much of its content is the same stuff available elsewhere online.

    The media Twitterati love HuffPo and slam sites from firms like Demand Media, AOL’s Associated Content, etc. But other than some real news content like that mentioned above, isn’t HuffPo just another “content farm”?

    As Jay Rosen tweeted yesterday, HuffPo did an article titled “What time is the Super Bowl?”, a ripped-from-Google-Trends piece of SEO spam than including variations of its title several times (and even mentioned that the topic was popular on Google Trends). Today HuffPo is cashing in on another popular Google Trends search topic, “Super Bowl score by quarter.”

    I find it hard to take HuffPo seriously as a real news site when its stories on, say, the Egypt crisis are on the front page next to “Kim Kardashian racy pics,” etc. Looking at the current “most popular” articles on HuffPo: Christina Aguilera messes up national anthem, Obama-O’Rielly interview, Ed Schultz-Jon Stewart feud, Making the L-word real, designers question Steve McQueen’s masculinity, and Michelle Williams’ “hate sex.”

    The fact that HuffPo gets much of its content from unpaid contributors is also troubling to me. The site’s strategy seems to be:
    * Pay for some quality news content that’s partisan, but because of that will get lots of traffic & sharing on social media from people who agree with HuffPo’s political position. These people will write comments, further adding to HuffPo’s traffic & page views, which add to the ad rates it can charge
    * Use unpaid bloggers to generated lots of content that fills the site, doesn’t cost anything, & will generate lots of page views (esp. since the unpaid bloggers will promote the content to their contacts).
    * Generate even more page views with content-farming SEO spam and trashy tabloid “nip-slip” pieces and gossip.

    Yes, it’s a successful strategy. But if this is the future of “news,” or even “content,” I’ll say “no thanks.”

  • Nester

    AOL really? Doe anyone every go to or use AOL anymore??? Take the $$$ and run Arianna.

  • http://thesocialjoint.com Lucretia Pruitt

    “Content is no longer scarce, people.”

    Content worth reading, sadly, still is.

    • walter yost

      amen, lucretia. journalists provide much more than ‘content,’ they provide journalism. and that’s what is invaluable to a democracy. as long as ventures like huffpo devalue journalism and journalists we will all suffer the consequences.

  • http://jordanraynor.com Jordan Raynor

    “Making content for search is not, I believe, a growth strategy, as the more Google becomes personalized and successfully seeks out signals of quality and originality, the more SEO will die as a black art. So to execute on its content-and-advertising strategy, Aol needs brands with engagement. Huffington Post is that.”

    Very well said, Jeff. HuffPo has proved it understands how the new internet links to news content. Lover her or hate her, Arianna Huffington understands this better than almost anyone else out there and AOL is smart to buy her out at this seemingly high price.

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  • Jeffrey Gross

    ” the value of curation, the power of peers, the link economy, passion as
    an asset, and celebrity as a currency” Yeah, I’m really not sure those words mean anything…

    • Stan Hogan

      They mean “if you’re gong to play in this sandbox you better have a day job.

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  • http://blog.digidave.org Digidave

    Fully agree that it’s possible for this to work – but it really does depend on whether or not Arriana is given the wheels to drive and if she doesn’t second guess herself.

    If she steers to far to the center for HuffPost – she’ll lose a loyal audience. Patch could be her entrance into local – and that can be the “center” car in the fleet.

    But if Arriana isn’t given free wheel. If AOL hinders the vision – it could come back to bite everyone in the butt. We shall see…..

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  • http://www.foursides.ca James M

    Amber Mac regularly says on her show on the TWiT network, she discovers things through her social network more than through search. As SEO dies off, as Jeff said, content will have to be accessible by other means. Purchasing HuffPo after buying TechCrunch lines them up to offer something along the lines of The Daily – curated content delivered to the iPad or other device. With an emphasis on quality instead of content that is SEO powered, maybe Aol will be able to create something better than what we see now.

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  • http://ppalme.wordpress.com Peter Palme

    Fully agree. Blogging is not always about getting paid for doing it. There are many other drivers. I blog to summarize my learnings around continuous learning and development and to connect to other people. My blog is an openly shared learning journal and I use tools (surveys, polls) to get deeper insights especially in areas where research is lacking. If one would rely on an income as a blogger for HuffPo this could be the wrong personal business model ….

  • Andy Freeman

    I see lots of complaints about free content.

    If a specific bit of free content is “good enough” from the reader’s perspective, what’s the problem?

    If you want to make money, you better have unique, valuable, and good. If you need to take short-cuts, take them wrt good, because if you’re not unique, you’re likely competing with free.

  • Ian

    my reaction to hearing the news was to to immediately unsubscribe from the Huffington Post mailing list…

    • http://www.buzzmachine.com Jeff Jarvis

      take that!

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  • Christo

    Nils Pratley writes for the Guardian: ‘It doesn’t add up : Well, OK, the Huffington Post is an interesting business that has made a big splash in medialand. But, come on, it is economic madness to buy it for 10 times last year’s revenues, as AOL is doing. 1+1=11, says Arianna Huffington, who can afford to enjoy the joke. The laugh is at the expense of AOL shareholders.’

    http://www.guardian.co.uk/business/2011/feb/07/ladbrokes-888-takeover-aol-huffington?INTCMP=SRCH

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