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Arianna Gets Paid; Huffington Post Bloggers Get Mad

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A cadre of some 6,000 bloggers blog for free on The Huffington Post, among the top five most-visited websites, with 25 million unique visitors a month. So it is little wonder that the news of its sale to AOL has gone viral.

in March 2009, the site was poised to break even on revenues of between $6 million and $10 million a year. At the time, HuffPo’s unique visitor numbers were up around 11 million a month, and advertisers were salivating at its top-ten ranking amongst American newspaper sites.

It is all about fresh news and free bloggers. I know about blogging because I too blog for free right here at Blogcritics.org (where contributors can make a little income through Google ad clicks). For most it has been all about the exposure and writing which makes them happy. Writing makes me happy. Would pay per blog make me happier? That question is moot because I have a day job; but these days many journalists are singing (read blogging) for their supper.

Just who is Arianna Huffington and what does she want for America? Arianna Stassinopoulos Huffington said in an interview with Mary Matalin:

Growing up in Greece, everyone knew someone who’d left to find a better life in America. That was the phrase everyone associated with America: “a better life.” When I came to live here in 1980, I knew that there was no other place I’d rather live. And I still feel that way. But something went wrong,,,

“Something went wrong…” Hmm, is that why she wrote a book entitled How to Overthrow the Government in her new country? And in her latest book she rights or rather points out what has happened to America: in her words it is now “Third World America.”  When questioned about that phrase Arianna was quick to point out that she was just warning us! That’s hubris in my book. This Greek geek, once married to a wealthy American, is now warning America that it is failing its middle class…classic. If she got any more ominous in her book titles she would be wearing a trumpet instead of just sounding one.

Before Arianna became HuffPo, she was a writer and author who lived the high life and wrote books about the soul. So she knows all about karma, the soul, reincarnation.  While Forbes touts her handle “queen of the new media,” others, like myself, think it is more like “New Age Crone.” Arianna fancies herself a writer. She’s no William S. Burroughs but her books have sold well, especially after ditching the pseudo-science and Republicanism (she was Right before she was Left) and jumping headfirst into left-wing politics and the election of one Barack Obama. I think it was the celeb bloggers and the news aggregation that put her on the blogging map, because yhey imbued her with an aura of global geek and one of the most powerful women of 2010.

Arianna is 60 and the word “crone” fits because its original use describes the older, albeit cantankerous, wise woman. It dovetails with the similar-sounding “crony,” referring to seasoned politicians with power keeping each other in the loop.

Before HuffPo Arianna was married to Michael Huffington (who discovered he was gay); she considered running for California governor when it was time to replace Gray Davis. Arianna was a Greek immigrant who would later jet-set between the Greek isles and Hollywood (an isle to itself). She has friends in high places—we get it—and she calls on them frequently or vice versa to have their say on the Huffington Post. The celebs don’t need the money but I dare say that many of her 6,000 bloggers do need some monetary compensation if not outright jobs. A recent staff photo pictured a small staff with one African-American male! How’s that for diversity?

You paid what?

Financial observers naturally think AOL overpaid for Huffpo; what else is new? Merger-mania lives and as Einstein said everything’s relative thus, that price is probably the least AOL has spent. From Forbes:

She is the co-founder and editor of the Huffington Post, a left-leaning website that has more than 24 million unique monthly visitors. As a result Huffington has been dubbed “the queen of new media.” The site is a mix of news, politics, opinions and entertainment, and is fed by an army of 6,000 free bloggers and celebrity contributors. She and partner Kenneth Lerer raised $4 million to start the site, and have since raised $33 million from venture capital firms. Profits have remained elusive, but this may be the year HuffPo posts a modest profit. Her interests also stray to the printed page: Huffington has written biographies of Pablo Picasso and Maria Callas, and her latest is titled Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream.

While the merger is not a done deal until March or so, the news has gone viral. Her response to the AOL buyout has been a blog with a calculation of 1 + 1 = 11—that’s got some bloggers wagging their fingers and working their vocal cords to laugh out loud at the metaphor. What was she thinking? So I did a little digging into the history of AOL mergers and came up with two words: Time Warner and Bebo. Ted Turner is still seething after losing nearly a billion dollars (and Jane Fonda) and his place at Turner Network after the deal went sour. When AOL bought out Time Warner for billions back then, they were warned: you are paying way too much for that vehicle. AOL persisted and the marriage was on the rocks and down the tube before you could say A-O-L.

It lasted tenuously for nearly 10 years and was dissovled in 2009. And this week is the anniversary of that financial merger disaster, listed in textbook economic lore as “How not to do mergers.” Enter Arianna: some have posited that AOL is paying $300 million in cash and $15 million in stock options just to boast Arianna at the helm. My first thought: what if she dies? Would AOL be back to square one? Probably not. Arianna’s take is said to be in the neighborhood of $100 million, but some put the final figure closer to a mere $18 million. Still, is that figure viable after taxes and loan paybacks? Nonetheless it sounds like a lot, doesn’t it? Well, considering that AOL paid the couple who created the also-ran social network Bebo $850 million, Arianna got played for a chump, change that is. 

And what does this deal tell us about the inner workings and stability of that storied blog?  To the financial bloodhounds it reeks of insolvency and an unsustainable debt ceiling and stock loss around the corner. Is AOL yet the content cow in this partnership? They should probably let Arianna finish that sentence.

HuffPo was started on a dime but extended into the tens of millions in loans. Still, Arianna wins and the deal will give her the best of both worlds: helm master at AOL and Huffington Post; out from under debt; and reigning queen of the blogosphere. Oh, and very wealthy to boot. What about her future? She can’t exactly kick back and put her heels on the desk. She probably (we hope) won’t be cranking out any more political treatises and going on the road to hawk them. No, she will be way too busy keeping the AOL deal humming and the minions who work for them barefoot, pregnant, and happy.

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About Heloise

  • Costello

    I can see why you blog for free as your article fails to deliver on the headline. What HP blogger is mad? You never tell us

  • Heloise

    Read the links. Too many angry to point one out. I am also asking why more of them have not called her out. A few have. That sub heading not really the point.

  • Heloise

    Besides it is not a done deal. We will see who comes out if Arianna gets paid. Right Now all pure conjecture and obviously flies over your little head Costello :)

  • Heloise

    Oops I see my links did not make the cut. I have posted at my blog too.

  • http://heloise8.wordpress.com/ Heloise
  • chris

    AOL is recognized for an amazing ability to make the most idiotic of corporate moves, but the Huffington Post ‘purchase’ is the most unwise of all. The history of the ‘post’ is one of wild, random wanderings into socio-political fields which only annoy or worse, offdend intelligent people of all political opinions by uninformed posturings, and wild commentary. This action will only bring harm and disgrace to AOL.

  • Heloise

    Too true because Armstrong the guy who finishes her sentences is conservative. My hope is that at least when a done deal her free bloggers will call her out and leave in droves. Some blogs have noted this. Others say they just wanna get paid not laid. My take.

  • http://heloise8.wordpress.com/ Heloise

    The Daily Beast has a blog but they have cited how many users are leaving and deleting their accounts. But the bloggers have not blown their cover…yet, unless they are posting discontent under another name.

    The other consideration is that after the sale the freebies for Huffpo will be the good ole days. And that bloggers will not blog for free for AOL. All of this is as yet unknown territory.

    The verdict is out as to whether bloggers will get revenge and leave…I am only suggesting that they do “get mad.”

    So far this is the only article on the subject on Blogcritics, that’s why I wrote it. We can see what folks around here think of HP. The editors here have always voiced their shock at how poorly edited the articles are at HP. I’ve also seen how they remade their blog over and took many ideas from BC and just took over many of my pet idioms and made them their own. I guess it’s still imitation sincerest form of flattery.

    We have good editors here and if this article was lacking I don’t think Jon would have published it without me reworking it, which I did not do.

    Heloise

  • http://heloise8.wordpress.com/ Heloise

    A word of encouragement “free” bloggers

    No blogging is not free by any means. It takes time. And to my detractors and critics a note to say that now I am blogging for “free” but it is at my discretion and writing what I want to write about. When I needed a job and money to support myself I turned to my considerable talents. And immediately found work with a large, very large corporation. I was a consultant, free lance, made my own hours worked from home and used my editorial and writing skills.

    I made anywhere from 2K to 5K a month for what was essentially part-time work. Now, I don’t need to supplement my income. I could write for fees or for fun. Right now I chose to write for fun. It takes time to write. It takes effort and energy. I know. It takes the right karma too. It costs something and the return is not always in dollars.

    For the record you can make money at writing if you want to and if you the skills. I am lucky I have choices.

    If you can write and places like Huffpo won’t compensate then find another gig. Because making money in that situation will probably never amount to anything. Look for it, find it.

    Heloise

  • Mimi in Miami

    In another article, this was HuffPo’s oh-so lame reason for not paying bloggers…

    “Paying bloggers introduces a different kind of economics: cost benefit. Instead of an open exchange and dialogue, editors would have to judge submissions as worth money or not.”

    Yes, HuffPo’s bloggers are mad, as well they should be.

  • Heloise

    What a lame excuse indeed. Because the “free market” which probably does not exist in Greece means that you buy something that is worthy of monetary or barter exchange. Simple economics. We see Miss Huff has trouble with numbers ala 1+1=11 how ridiculous.

    BTW HP bloggers AOL pays its bloggers I think 50 or $70 per article as a flat rate. You all might want to think about that when the deal is done.

    THanks for your comment.

  • http://blogcritics.org/writers/alan-kurtz/ Alan Kurtz

    I’m unclear where Blogcritics fits into this discussion. When Technorati acquired BC in August 2008, industry buzz was that Technorati paid $1 million for a site then drawing a million unique monthly visitors. (Huffington Post, by contrast, attracts 25 million unique monthly visitors.)

    As part of the deal, BC founders Eric Olsen and Phillip Winn became full-time Technorati employees. Until September 2010, Eric served as publisher of both Blogcritics and Technorati.com, and his wife Dawn Olsen was senior editor and entertainment channel editor at Technorati. Obviously, BC’s founders made out quite well, splitting $1 million and each getting a full-time job out of selling BC.

    So Technorati now profits from BC’s ongoing revenues. As a Technorati subsidiary, BC runs advertising from big-name corporations, and gets a modest commission from Amazon on products purchased as the result of BC links. Combined, that must generate a healthy monthly revenue.

    So where does that money go? Just as with Huffington Post, BC doesn’t pay its writers. With few exceptions, BC doesn’t pay its editors. BC gets its tech support from Technorati. And nowadays web-hosting service provider fees are a small fraction of what they were in 2002 when BC was launched. What other operating costs would BC have?

    Accordingly, Blogcritics must be a cash cow for Technorati. Of course, that’s based on not paying writers. Other than size, then, it’s hard to see how BC is much different from Huffington Post.

  • http://heloise8.wordpress.com/ Heloise

    Alan don’t disagree with your summation at all. In fact I think one blog or person here said that BC somewhat pioneered the model of free blogging. I’ve become a better writer since writing here.

    But as I said on the other blog about kindle publishing one has to take one’s career in hand. Arianna was on TV every damn day saying nothing. And even with so many visitors they were not in the black.

    BC probably has servers to pay for and some help they pay. But all the other editors left on the same day why was that? More merger mania?

    If BC has offices in Frisco then that’s expensive. I had the thought some time ago when I did not write here for like a year that really the folks here at BC needed to pay the writers because I know that just Heloise was bringing in folks and building the brand. But no one else seemed to mind so I just stayed away.

    I am about to build my niche market so that I can have something already going when I retire in the next 5 years or so. It is okay if it takes off later.

    Then there was the Julia and Julie book and movie. But she was one in a million. There are a few bloggers who just get lucky and get big brakes, but thems the brakes and the karma.

    I will wait my turn–again.

    H

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    So have I, became a better writer for the fact, but I don’t sweat small shit. Self-promotion is something I simply won’t do. So I write for posterity, I guess.

  • http://heloise8.wordpress.com/ Heloise

    yeah, I am not big on self promotion either. I mean few know I write here or at all. Most people have not even heard of the blogs that we frequent all the time. I ask people and they never heard of BC and many not heard of HP and others.

    I just looked at the webby awards nominees and I ain’t never heard of none of those blogs except maybe one.

  • http://heloise8.wordpress.com/ Heloise

    Let’s face it if your face is not on TV or news, like that ugly Maddow, then you won’t get your books bought. Just the name recognition does it. No self promotion needed.

    Besides have you noticed that the majority of radio talk hosts ALL have JDs? I mean do you have to be a freakin lawyer to get a radio show?

    Then there is Oprah and her sorry ass. She hates black people and has never promoted any one of us except Tyler Perry whose movies except for his last one are simply sleeping pills on a CD. But she made him.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    As of this point, BC is still an enclave, and that’s in spite of all the Google headlines we’re presumed to get – a community of megalomaniacs who have nothing better to do than arguing with one another until they all turn blue in the face. Unfortunately, you may have to count me among that number, though I pray for day of liberation.

  • http://heloise8.wordpress.com/ Heloise

    LOL.

    I have been playing twitter and wonder if there might be a merger there sometime. I have nearly 500 followers and I did not even try for it.

    Could that be a market to market stuff? It is turning so commercial. I might need liberating from the twitter too.

    It’s okay to have a big ego as long as you can fit through the doorway!

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    What do you expect, Heloise? America is all about trivia. We’ve made it a concerted effort to discourage thinking. If you’re serious about your output, try Germany. I don’t exactly approve of their emphasis on highbrow culture and denigration of anything that comes close to being trite, if that’s your cup of tea, try your wares there.

  • http://heloise8.wordpress.com/ Heloise

    I just read 2 interesting articles online and they were juxtaposed. Mayhill Fowler left last year and wrote “Why I left Huffington Post” and it’s real long but this woman was a professional and she begged them to reconsider paying her. They would not so she left.

    THe other one is like a rewrite of this article and my comment techdirt about how one should not get paid if one did not sign on the dotted line in the first place.

    I think there is dignity in getting paid for writing as Mayhill wrote. And then there are contracts. I think people just thought that that evil crone Arianna would one day do the right thing. She hired Fineman after he left Newsweek and paid him 6 figures.

    Mayhill walked away. But guess what they tried to recruit me for Off the Bus when they had that going to help Obama get elected. I mean they expected me to use my gas and money to drive to events then report on them all for free. I simply never responded and said the hell with them. I forgot about that one.

    Huffpo did try to suck me into their evil network. The bottomline may be more hits for your blog but hell that don’t mean you will make money off a few thousand more hits. It takes MILLIONS of hits and that is not what HP or anyone can deliver.

  • http://heloise8.wordpress.com/ Heloise

    okay Roger. I do plan to go international. I can have my work translated on google for free, so I am already planning on that one.

    I do like Germany but they may not like me.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Look, Henry Miller, if I’m not mistaken, couldn’t publish in the land of the free and the brave. James Joyce had a hard time. We’re still beholden to Protestant ethics and the Victorian mindset. American people by and large are children who simply refuse to grow up. It is a Christan country, Christian in the worst sense of the word – uneducated, bigoted and plain stupid. Whatever future it had, it squandered it.

  • http://www.RoseDigitalMarketing.com Christopher Rose

    Roger and Heloise, my take is that Blogcritics is as wonderful as it is frustrating.

    I love the way anybody can come along and write whatever they want (yeah, there are some very skimpy restrictions, but that isn’t really relevant in this context) and find the level of response their work generates.

    Examples of this would include, on an obvious level, what happened with Barbara and her House stuff (personally I think that show has jumped the shark now, but it is still pretty popular) but also the less obvious things like the virtual community that exists around the Unnecessary Pap Smears article.

    I also love the comments space and consider it just as important, in some ways even more important, than the articles that spawn it.

    On the other hand, Blogcritics always seemed to lack any sense of commercial dynamicism (is that a word, my spellchecker doubts it, but I think it is wrong) or even any entrepreneurial spirit under the original founders, which is kind of weird for Americans.

    There was also a two tier management system (and still is) that was really pretty dysfunctional and incredibly frustrating.

    The sale to Technorati came as a big surprise to most of the editorial team and, at first, I hoped it would mean that the site could become both more business-like and more creative. That hope still burns but is now more of a flickering flame than a roaring fire.

    Presumably, from the company’s perspective, I am too far down the food chain to be involved but, from my perspective, I really don’t understand what Technorati’s plans for the site are or how they see it evolving in the future.

    It seems to be the case that Technorati’s main focus these days is its advertising network, not its own primary site, which seems to have evolved from being a definitive, if poorly structured and managed, blog search engine cum directory into an even more sprawling and unfocussed version of Blogcritics, which is already pretty diffuse.

    I do know there are quite literally thousands of potential new thematic content sites that would be of real interest to their notional audiences and possess meaningful commercial appeal too. One would have thought this was so obvious a thing to do as to be a no-brainer…

    On the other hand, it has never been easier or cheaper to launch any kind of business, so if Blognorati doesn’t take up the cultural and commercial space practically begging to be occupied, I am sure others will.

  • Heloise

    I was hoping that Al Gore bought us. We needed something solid and focused and we don’t have that.

  • kurt brigliadora

    “The huffington post” I think she got paid…simply because the number of visitors warrented the price tag, you can learn someting from that greek gal!

  • Heloise

    It’s a done deal. AOL stock has sunk and the deal with the devil done. Sell your AOL stock if you got any since this sellout got paid.