Early Reactions to the AOL/HuffPo Deal Generally Favorable

Given the size of the $315 million deal that AOL made to purchase The Huffington Post and the impact the sale is likely to have on the future of the two sites and the press in general, it’s not surprising that the media world has been talking about almost nothing else on Monday. What is surprising is how many of the early reactions have been positive, or at least guardedly so, with many experts saying it’s a move AOL had to make, and in that sense a smart one. Arianna Huffington says that she and AOL CEO Tim Armstrong believe the “blending” of their two organizations will have a multiplier effect. Huffington wrote of HuffPo’s own prospects: “Far from changing our editorial approach, our culture or our mission, this moment will be for HuffPost like stepping off a fast-moving train and onto a supersonic jet.”The move is more of a high-risk gamble for Armstrong and AOL. “AOL is still in A-O-Hell” as Om Malik, founder of GigaOM, wrote, continuing to lose revenue, traffic and subscribers. As Ken Auletta of The New Yorker put it, the acquisition is thus “the equivalent of a fourth-quarter Hail Mary pass. The game clock was ticking down on CEO Tim Armstrong’s pledge to demonstrate by the second half of this year that AOL could mount a comeback from the near dead.”Malik similarly compared it to the final scene of Butch Cassidy and the Sundance Kid: “The ever increasing Web inventory is like the Bolivian Army firing on AOL and others who have not yet come to terms with the futility of chasing pageviews,” referring to Armstrong’s recently leaked plan to boost the brand and increase pageviews by more than 450 percent.As Newsweek tech editor Dan Lyons sees it, Huffington and Armstrong are likely to go the way of Butch and Sundance. “No doubt [HuffPo CEO Eric] Hippeau and [HuffPo co-founders Kenny] Lerer and Huffington were drinking Champagne last night, but the truth is, this deal is not a victory for either side. It’s a slow-motion train wreck and will end in disaster,” he wrote on The Daily Beast.Gawker’s Nick Denton told Lyons he was “disappointed in The Huffington Post. I thought Arianna Huffington and Kenny Lerer were reinventing news, rather than simply flipping to a flailing conglomerate.”Financial journalist Felix Salmon, on the other hand, thinks the deal makes sense: “AOL gets something it desperately needs: a voice and a clear editorial vision…As for HuffPo, it gets lots of money, great tech content from Engadget and TechCrunch, hugely valuable video-production abilities, a local infrastructure in Patch, lots of money, a public stock market listing with which to make fill-in acquisitions and incentivize employees with options, a massive leg up in terms of reaching the older and more conservative Web 1.0 audience, and did I mention the lots of money?”Peter Kafka at All Things Digital agrees: “Here, at least, both companies are trying to do the same thing: make a lot of Web stuff at a low price and sell ads against it,” he wrote. “The broad strokes here make sense to me.”Both David Carr of The New York Times and Ed Morrissey from the conservative blog Hot Air have noted the interesting choice AOL made to go with a site so identified with the left. “Given that Ms. Huffington has been very straightforward about using a liberal prism on the news, AOL is now handing control of its still considerable traffic and content assets to someone who uses ideology as one of her decision tools in creating news content for consumers,” Carr wrote. “Putting a political activist like Arianna Huffington in charge of all AOL content will upend [AOL’s political] balance and might have a significant number of subscribers and readers heading for the door,” said Morrissey. “The end result might be less a combination of the two readerships and more of a replacement of AOL’s community with that of the HuffPo.”Kris Broughton at Big Think seems more concerned about how Huffington will fare at her new post: “Just what exactly is it that Huffington is supposed to do now that she is the head of a corporate Internet content provider, a behemoth with all the attendant problems bureaucracies bring?”Meanwhile, Business Insider asks the most important question: “Who made bank?” The obvious answer is Arianna Huffington and Ken Lerer, co-founders of The Huffington Post, but also the venture capital firms that invested in the HuffPo project. Newsweek’s Lyons wrote, “In June 2009, as Softbank grew impatient for a return, the VC fund had installed Eric Hippeau, one of its partners, as CEO of Huffington Post. In our conversations, Hippeau talked about how he was determined to build a ‘strong and independent’ business—which in the world of tech and media is code for, ‘We’re for sale.’”

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Early Reactions to the AOL/HuffPo Deal Generally Favorable

Dylan Byers

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Dylan Byers