Fading internet giant AOL has agreed to buy liberal news website the Huffington Post for $315m, creating an internal group under founder Arianna Huffington that will oversee all of the company’s media operations.
The acquisition comes just after the tenth anniversary of Time Warner’s merger with AOL, a deal of which MacUser wrote: ‘They missed the millennium by a week or so, but as a portent of Armageddon you couldn’t do much better.’
Time Warner eventually wrote off most of the billions it paid for the service provider – which had already been burying itself in a pyramid of its own devising, spending more on aggressively marketing its connection deals than it could recoup from its dwindling base of low-end consumers – before demerging in 2009, not before AOL had paid $850m for Bebo, a social networking service that just two years later was sold off for an estimated single-digit sum.
Reinventing itself as a content owner has shown no better signs for AOL. A 1 February report in the independent New York-based Business Insider (itself touted by some as a future AOL takeover candidate) reported that a new journalists’ handbook, ‘The AOL Way’, being propagated through the company by CEO Tim Armstrong was not finding favour with all editorial staff. One described AOL as ‘a bullshit company’ and his decision to join it as ‘the worst career move I’ve ever made’.
The guide – seen as representing a step towards low-quality ‘content farming’ – sets a variety of mathematical performance targets, dictating that articles must generate a minimum number of page views by focusing on ‘High-Demand Topics’ with traffic and revenue potential. A supplied example: ‘“Macaulay Culkin & “Mila Kunis” are [sic] trending because they broke up -> write story about Macaulay Culkin and Mila Kunis.’
The ‘base cost’ of an article commissioned from AOL’s Seed network (seed.com), which offers work to budding writers and photographers, is given as $25, which appears to include overheads as well as the journalist’s fee. In-house writers, meanwhile, are expected to turn in five to 10 stories per day.
This model does not currently apply to acquisitions such as industry blog TechCrunch, which AOL bought in September 2010 from founder Michael Arrington (not to be confused with natural gas heir, conservative Christian, Republican congressman, husband of Arianna and latterly left-leaning LGBT activist Michael Huffington), who remains in post. According to a TechCrunch article on the merger, Armstrong ‘is pursuing multiple content strategies at the same time and will continue to do so. “The AOL Way is just one of the ways we are working on content.”’
Nor does Huffington plan to assimilate AOL’s existing brands into her new empire, except where they’re not ‘distinct’. AOL’s corridors must even now be ringing to the sounds of distinctiveness. (Its tills, judging from Armstrong’s internal push for aggressive linkbaiting, not so much.)
HuffPost, as it’s known in the trade, has built a modern web platform that closely integrates multiple media, social networking and traffic metrics. This may be seen as part of its value, but – according to TechCrunch, which should know – AOL is already in the process of consolidating two dozen content management systems (CMSes) down to two. It also has a reputation for creating content cheaply, encouraging bloggers and aspiring journalists to contribute articles free of charge.
Awkward questions about the disparity between HuffPost’s volunteerist business practices and the left-liberal political scene now embraced by Huffington, a former conservative Republican activist who once set up a website calling for Bill Clinton’s resignation, are unlikely to abate now that she stands to gain a large cash sum and a guaranteed multi-million-dollar annual salary from the sale of a site built on the work of interns and volunteers.
Huffington told Wall Street Journal technology writer Kara Swisher that the deal was a ‘1+1=11 concept’. AOL founder Steve Case, who left the company after the Time Warner deal went sour, tweeted in response: ‘Really? That wasn’t my experience.’ Time Warner shareholders will follow that in spades.
As we concluded presciently in 2001: ‘In five years’ time, [Warner Bros’] Looney Tunes will still be funny, but the joke of bullshit internet companies may be wearing thin.’ After ten years of getting thinner, AOL must be hoping against hope that they’ve finally bought something right.
