AOL Buys Huffington Post for $315 Million

AOL Buying HuffPo for $315 Million: Arianna Huffington Keeps Editorial Control

AOL is going big in its bid to rule the content world. The former dial-up giant has bought the web's biggest content success story, the Huffington Post. HuffPo started as a left-wing editorial site before discovering Google Trends and going more general. Since then, it has experimented with varying levels of user-generated content before settling on an in-house editorial model that has seen its traffic grow healthily.

So AOL is paying $300 million in cash and $15 million in stock for The Huffington Post. This is a great deal for HuffPo, no matter how you look at it. Should the merger succeed or fail, HuffPo's investors are already paid. Arianna Huffington herself gets not only the cash but a stock swap: AOL for HuffPo. Huffington Post staff get a stock swap in return for unvested HuffPo options. The deal was signed at the Super Bowl, hopefully not during the halftime show.

Will this work for AOL? It may, but it may not. While HuffPo drives plenty of traffic , the content market itself is in a state of flux, as has been the case since, well, the birth of the web as we know it. With that in mind, AOL paid $315 million for a content site. Nobody else making noises about buying Huffington Post came anywhere even close to that.

AOL Deal a Big Win for HuffPo Investors

This is a tremendous coup for HuffPo, who previously weren't even seriously entertaining buyout offers, at least not publicly.

AOL has big plans for HuffPo. Some would say overly optimistic, but time will tell. Remember, HuffPo was making money, while AOL was not. No matter what happens, though, HuffPo investors are gettin' paid. Now it's up to AOL to make their new property work without scaring away readers and HuffPo writers.

 

The buyout has attracted inevitable comments from users, who, while definitely important, do not actually pay the bills, sit through tetchy editorial meetings or answer late-night "site down" phone calls. Some of these users have sagely predicted the end of HuffPo as they know (read: expect) it. This happens with every web acquisition.