In a blockbuster move aimed at reinventing the company, AOL has acquired The Huffington Post for $315 million.
As part of the stunning agreement, Huffington Post co-founder and editor in chief Arianna Huffington will assume control over AOL’s editorial operations. The companies plan to integrate Huffington Post and AOL content going forward, said officials.
The deal presents a fascinating scenario, placing one of the hottest, most innovative companies to arrive on the Web in the past few years in the hands of one of the most troubled. Launched in 2005, The Huffington Post has enjoyed a meteoric rise in popularity. The site now reaches upwards of 26 million unique users, per comScore, and was said to pull in $30 million in 2010 with the possibility of doubling that revenue this year.
HuffPost is also known for a devout, liberal, urban following. The site receives contributions regularly from the likes of senators, congressman, celebrities like Ben Affleck and even former presidents like Bill Clinton.
Meanwhile, AOL is known to many Americans as the way people used to get e-mail. Over the past two years, CEO Tim Armstrong has been seeking to re-establish AOL as a major player on the Web, undertaking massive cost cutting while doubling down on content.
However, AOL’s content strategy under Armstrong has been somewhat erratic. The former Google executive has pushed AOL to produce thousands of low-cost, evergreen stories through its Seed initiative while dumping AOL properties like Fanhouse (AOL Sports is now outsourced to Sporting News).
At the same time, Armstrong has not been shy about acquisitions of content sites. Last September, the company snatched up the red-hot tech blog TechCrunch as well as the video distribution company 5min Media.
Thus far, Armstrong’s moves have yet to pay off with advertisers.