HuffPo Sells Out to AOL – The New Math of the Internet Media Age

by on February 8, 2011 · 6 comments

in Media

So here’s the “new math” part: one plus one equals eleven.  This magic is achieved, so we’re told, by taking a “new media” company and merging it with a “formerly new media company”. The Huffington Post has been sold to American Online for $315 million (mostly cash, thank you). The logic behind this deal is that the resulting “efficiencies” and “marketing expertise” are going to create a synergy that will make a “new” media entity into a cash spewing mechanism like the “old media” moguls of yesteryear enjoyed.

The Huffington Post, with its staff of 200, claims an audience of about 26 million regular visitors. Much of its content comes from aggregation (links to stories posted on other sites). Another content component is the various celebrities who feel compelled to chime in with their opinions. And then there’s the original content, a combination of crowdsourcing, a tiny investigative staff and the contributions of unpaid bloggers who are thrilled just to have the opportunity to reach any audience outside their immediate circle of family and friends.

HuffPo, which launched on May 9, 2005 by positioning itself as a liberal counterweight to the popular right-leaning Drudge Report, has attained a readership in the same neighborhood as sites from traditional media heavyweights like the New York Times.

America OnLine, dubbed the “the Web site your parents might still pay for even though there’s no reason to do so” by Peter Kafka over at the All Things Digital blog, is a much larger entity. Their network of content racks up about 112 million monthly visitors utilizing a staff of 5000 employees.  Their quest to remake the company into a viable 21st Century media colossus has focused on quantitative rather than qualitative growth, with editors being told to choose stories based on profitability rather than newsworthiness, according to a documented entitled the “AOL Way” leaked by the Business Insider.

AOL started out in 1986 as an on-line game service and grew into the largest portal of the dial-up internet, marketing it self through mass mailings of CD’s (now collectibles, by the way) that promised new users to the internet a safe and easy way to join the crowd.  Its merger with Time-Warner, which held out the promise of merging the “old” and “new” media worlds, is regarded as on of the worst corporate mergers ever. In recent times the company has sought to recast itself, focusing on content creation and marketing.

Both companies have been playing the “let’s manipulate Google” (and hence readership) game. The difference between them has more to do with brand identity: for all its numbers, AOL’s public persona is dwarfed by the Huffington Post’s uniqueness in the marketplace.  In recent times, HuffPo has been willing to dilute its brand in the quest for numbers, adding an ever-increasing amount of celebrity gossip and sexually suggestive content to its formerly politics-driven facade.

At the bottom of all this gaming lies the ugly truth that undermines the traditional, the old-new and the new media as financial entities. Dead tree (magazine/newspaper) publishers were able (for many years) to exaggerate their readership (and value as an ad medium) with ever increasing “pass-along” numbers and charge sky high rates based on those figures.  The first generation of internet portals/content providers was able to claim large numbers of “impressions” based on bulk data about internet usage. Today’s content providers are forced to live with more detailed traffic analysis that shows that there is a big difference between the number of “visitors” and the number of actual “involved” users who might be inclined to view/remember/act on advertisements encountered on a web page or blog.  In case you haven’t figured this out by now, most advertising claims made are about as reliable as promises made by candidates running for office.

To use the OBRag’s own web statistics as an example, in the hour or so it took me to write this story, a highly trafficked page on our site was a story I wrote back in December entitled “A Trojan Horse Measure Passing as School Reform”. Drilling down into what actually happened when our trusty stat-counter “counted” those visitors, I can see that nearly all of those visitors were using Google images looking for a Trojan Horse graphic.  We found this out the hard way back in the early days of this blog when Frank Gormlie wrote a story about local school teachers being busted for relationships with underage students; the word S.E.X. in the headline gave us major traffic, almost all of it from internet users pursuing the medium’s most popular past-time—searching for porno.

So, while there are undoubtedly pundits that will celebrate (or curse) the elevation of liberal Arianna Huffington as the curator of content for a vastly larger audience, I think that the bad news here is that, in the struggle for quality over quantity, the sale of HuffPo to AOL marks a decided victory for numbers over ideas.

I still believe that the turmoil of this transitional period offers unprecedented opportunities for citizen journalists to offer up news and views unvarnished by the filters of the bean counters and mavens of mediocrity.  And some of that may slip through the cracks at the AOL/Huffpo media empire.  It’s a brave new world out there on the internet, and I think that the lessons to be drawn from this merger are just another chapter in a book that’s a long way from being finished.

(Full disclosure: I have contributed stories to Huffington Post and have sought employment with AOL’s hyper-local Patch network.)

{ 5 comments… read them below or add one }

avatar mr fresh February 8, 2011 at 7:49 am

wow, I just got a cd in the mail for Huffpo/AOL signed by Nancy Pelosi. that’s what I call fast uptake on the marketing.

Reply

avatar tj February 8, 2011 at 8:07 am

Good – the sooner they get “everything” – the sooner they will fall.

Their own Greed will lead to their demise – as it always has.

“When will they ever learn” …

Reply

avatar doug porter February 8, 2011 at 9:06 am

here’s some good insight about the numbers games that some sites play http://goo.gl/Kxkle

Reply

avatar annagrace February 8, 2011 at 9:25 am

I agree that we are still in a transitional period, but corporate consolidation is still the name of the game.

Reply

avatar Frank Gormlie February 9, 2011 at 9:12 pm

Doug, excellent analysis. Here, to stretch another view is one from Bob Kall who publishes OpEdNews: “Huffpo Aol Merger A Left-Leaning Answer to Murdoch’s Fox Empire?” – Kall goes on:

“… the merger of the Huffingtonpost and AOL is that it’s a very good thing for the left. Arianna will now run an operation with over ten times the reach of the Huffington Post, and she’s proven her lefty loyalties.

The goal of the new merger is to dramatically increase the use of videos. As the world moves more and more to smart phones and digital computer pads, those videos may become the alternative to network news, particularly FOX news. And who knows, perhaps a further step will be a huffpost/AOL network or at least news channel, probably as a partnership with an existing operation.

There are some who are concerned that the merger will dilute the progressive dimensions of the huffpo, but I think Arianna will hold her own and keep the perspective and the coverage, probably building it even further with more original investigative journalism as well as video. I am very hopeful this is a disruptive event that could mean big changes.”

Reply

Leave a Comment

Before clicking Submit, please complete this simple statement to help us weed out the bots... Thank you! *

{ 1 trackback }

Older Article:

Newer Article: