Huffing and Puffing
AOL's strategy to generate revenue by bringing popular content took a big leap this weekend with the purchase of Huffington Post from its founder in a US$ 300 million plus US$ 15 million stock deal. As part of that deal, Arianna Huffington has signed up to a multiyear contract to work for AOL as editor-in-chief of a range of content areas including HP, media and female-focused content.
One of her first comments after the deal, which has been hammered out since last November, was she wanted to stay at AOL 'forever.' What with other AOL hires-and-their-sites not having the best of relations with Mike Arrington launching barbs at his co-workers, we'll see how long that commitment stands, but Huffington is very much the high caliber hire that could spur the AOL revival and the cost of bringing her into the fold makes her a very senior partner.
Huffington Post joins the likes of EnGadget and TechCrunch (see AOL Acquires TechCrunch for US$ 25 million, or Was it $40 million?) as highly-visible web properties under the AOL umbrella as the company aims to position its services as a next-generation media company. The deal brings a far wider range of readers to AOL than the likes of those tech mags that bring millions of geeks and their fast-clicking fingers, who are probably less likely to click adverts and interact in ways that more casual visitors mights.
In a press conference after the announcement, it seems that there is likely to be a bare minimum of redundancies. Huffington's first task could be take a look at AOL's Patch citizen journalism project and see what skills can transfer from HP's successful development of this budding form of media to AOL's budding project.
The total number of visitors to AOL after the deal now reaches some 117 million users a month in the US, with 250 million worldwide. With everything expected to be signed and sealed by the end of the quarter, 2011 could be the year that AOL's turnaround and CEO Tim Armstrong's vision really kicks into gear.