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.