Under the headline “A New Media Universe”, The Huffington Post proudly proclaimed on Monday 7th February 2011 that it had agreed a sale to AOL for $315 million.
The socialite editor who founded the title, Arianna Huffington, told investors in a telephone conference that she will stay with the title “forever” and that all her dreams are possible within the terms of the deal that was completed at the Cowboys Stadium in Arlington, Texas during the 2011 Super Bowl.
Subject to regulatory checks, the deal will be completed at the end of the first quarter or start of the second quarter of 2011. As part of the deal, Arianna Huffington, will be named President and Editor-in-Chief of The Huffington Post Media Group, which will integrate all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList. This will make Arianna Huffington one of the most powerful editors in the US.
Artie Minson, Chief Financial Officer at AOL Corp, outlined the financial aspects of the deal. AOL had estimated that the areas in which AOL and The Huffington Post crossover accounted for a $20 million loss for AOL in 2010. In contrast, Mr Minson explained the financial opportunities at The Huffington Post:
“In 2011, we expect it will do over $50 million in revenue and we believe it will be at a $100 million revenue runrate in the next 12 months and operating in the 30% margin range. Even on a standalone basis, we think this is a very good deal for us financially.”
Both sides have expounded the benefits of more international, hyper-local and niche content as well as the integration of Patch and StudioNow with the content services that Ms Huffington will be overseeing. The first international expansion will see the HuffPost cover Brazil, which is one of the three developing economies identified by President Obama as a significant challenge to US competitiveness in his State of the Union Address in January 2011. Arianna Huffington is also looking to increase coverage of women’s news and other content, an area which she says is under represented on the web.
The Huffington Post is owned by Airanna Huffington and Kenny Lerer along with a small group of private investors. $300 million of the $315 million deal will be paid for in cash. The site receives 25 million unique visitors per month and generated 4 million moderated comments in January 2011 alone.
Born Arianna Stassinopoulous in Athens, Greece, Ms Huffington is the ex-wife of former Republican congressman Michael Huffington. She stood unsuccessfully for election to the post of Governor of California against Arnold Schwarznegger in 2003.
Kenneth Lerer is the General Partner of Lerer Media Ventures, an angel fund in New York City, Vice-Chairman of Betaworks and Chairman of BuzzFeed. He is a past Executive Vice President of AOL Time Warner and was a founding partner of New York based corporate communications firm Robinson, Lerer, and Montgomery.
