You cannot blame Arianna Huffington for taking the $ 315 million ($ 300 million in cash) for Huffington Post from AOL and Tim Armstrong. Greg Coleman who is the CRO (Chief Revenue Officer) at Huffington Post actually came over from AOL and was replaced by Tim Armstrong with current AOL ad sales head Jeff Levic. Under the agreement Mr. Coleman will leave the Huffington Post.
The Huffington Post increase in ad sales from $ 31 million in 2010 to a projected $ 60 million in 2011 is impressive. And it’s because Huffington Post continues to provide solid aggregated content and it plans to deliver more original content BTW. I’m not exactly sure how AOL Patch (the local citizen news branch of AOL) will be integrated by Arianna Huffington. She’s also now in charge of Engadget, Moviefone (how long will that be relevant?), MapQuest, and TechCrunch. And Arianna has planned to move to New York from L.A. and Mayor Bloomberg of New York will be happy about the tax revenue if nothing else.
I understand the motivation on the part of Tim Armstrong and AOL to bring the Huffington Post under the umbrella. AOL continues its quest to remain (or maybe once again be) relevant. However I don’t completely understand how the deal works in the long term for the Huffington Post aside from the$315 million. What makes The Huffington Post cool is its somewhat irreverent and challenger brand identity. By becoming part of the mainstream (yes AOL is part of the mainstream), I hope that Arianna has not sold out more than she counted on doing. I for one would rather have had Huffington Post hold out for an IPO to maintain its solo identity status.
Of course it could all work well in that AOL again becomes a force and Huffington Post acquires a great distribution platform. But it would be interesting if not surprising to me.
What do you think – good deal? Bad deal? Why?
The Way I See It - Mark Kolier 
Interesting points, Mark. Especially about relevance.
However, I think in poking around at possibilities, you’ve actually stumbled upon the exact answer: distribution.
AOL has struggled to remain relevant for a long time…but only because of its size. It actually has tremendous content, parsed under potent brands that are directed at (and, I might add,) consumed by HUGE audiences.
While HuffPo’s P&L pro-formas may have pointed to a possible $60MM ad revenue for 2011, AOL can virtually guarantee that benchmark and beyond by turning to their already committed advertising partners. They get the writeoff now, and in four or five years, it starts turning some juicy profits. Not a bad deal in the long-term.
Also note that AOL can now look at rolling up other properties to amass even greater numbers in the politi-fashion arena and start to cross-market HuffPo to its zillion other audiences.
Smells like a win-win.
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I hope you are right Nader and that Arianna Huffington is (in the words of Mike Doonesbury – ‘buying in’ – not selling out. Thanks.
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