You’ve Got Mail!
AOL’s purchase of Huffington Post has brought with it rampant speculation about what the merger will mean.
Shares in America Online fell further on Monday just hours after a deal was inked – apparently in the tiered seats at the Super bowl in Dallas on Sunday – for AOL to buy the news and opinion web site The Huffington Post for a mere $315m.
It’s the latest in a series of acquisitions by AOL as it struggles to recover its once dominant position on the world wide web.
So why Huff Po?
Put simply The Huffington Post is one of the most powerful online publications of its kind.
It’s already among the top ten global news sites, which is not bad for a start-up that’s just six years old.
The Huffington Post has a small staff that break their own stories but its reputation has been built on trawling other news websites for headlines and exclusives and then publishing them all in one place on The Huffington Post. (Some accuse Huff Po of profiting from other’s work but let’s skip that for now.)
The site gets its name from founder Arianna Huffington, the one time Greek shipping heiress turned astute businesswoman, who will join the board of AOL as part of the deal.
By adding The Huffington Post to its growing stable of websites like MapQuest and the ultra-local news based Patch.com, AOL is hoping to attract more eyeballs to its own struggling site.
AOL has been having a tough time after it was “divorced” by Time Warner when the much-trumpeted merger from year 2000 fell apart.
Cost of clicking?
So might we soon be charged for reading The Huffington Post?
Analysts say it’s too early to say but it seems unlikely that’s the route new AOL CEO Tim Armstrong will take – but he might! Rupert Murdoch, after all, charges for online access to the Wall Street Journal and News Corps has just launched a pay-to-read daily newspaper for the Ipad only.
Rather, after AOL’s revenue from online commercials and dial-up connections shrank sharply in 2010, it’s thought Armstrong hopes that by building up his company’s portfolio of websites like The Huffington Post the advertising cash will flow back to AOL once again.
If it doesn’t work, Armstrong’s likely to receive one of those AOL “You’ve got mail” announcements via his laptop telling him Arianna’s taking over the whole shooting match – something that would cement her reputation as one of the most influential left-leaning businesswomen in the world today.