AOL has agreed to buy The Huffington Post, the fast-growing Internet-publishing startup backed by a controversial political figure, for $315 million in its third major acquisition of a power player in online media.
AOL is essentially handing over its publishing operations to the Huffington Post in the deal. The site’s eponymous cofounder, Arianna Huffington, will become editor-in-chief of all of AOL’s news content and oversee every media group within AOL’s network. That includes AOL News, PoliticsDaily, BlackVoices, SlashFood, and TechCrunch, which AOL recently acquired for $25 million.
A recent leak of AOL’s growth strategy for its media division showed a business ruthlessly devoted to generating more traffic through increased frequency of publication, better search-engine optimization, and more recruitment of talented writers and editors. The new way sets ambitious goals for site editors, requiring writers to post 5 to 10 stories a day and generate at least 7,000 hits per story.
Picking up The Huffington Post, of course, immediately ramps up the number of stories AOL publishes and brings a stable of well-known celebrities, like Alec Baldwin, and Deepak Chopra, who contribute blog posts to the site.
The deal is not without its difficulties. Arianna Huffington, famous for holding a few grudges herself, now must settle feuds like the insider war of words between the top editors of Engadget and TechCrunch, two well-read technology blogs in AOL’s stable. Also of note is a lawsuit filed by two Democratic power players over who originally came up with the idea for The Huffington Post, which was originally conceived as a left-wing alternative to the right-leaning Drudge Report, a headline-news aggregator.
AOL CEO Tim Armstrong, known as a dealmaker, hardly seems like he’s stopping anytime soon. The only thing that might slow him down: a lack of new targets. There aren’t many broad-topic media companies left which would make a visible difference in AOL’s traffic and revenue.
So AOL and its competitors — a group which ranges from online-media giants like Yahoo to old-line companies like News Corp., CBS, NBC Universal, and even AOL’s former parent company, Time Warner — look like they are better off snapping up the top players in specific categories like sports news, celebrity gossip, and the like.
Audience-measureent startup QuantCast’s list of the largest sites provides a useful guide. The first easily acquired online-media startup to pop up on the list: Zimbio.com, based in San Carlos, Calif. The site stacked with celebrity news and editorially curated. And it fits right in with AOL’s more aggressive efforts to tailor its content to display prominently on search engines like Google and Microsoft’s Bing.
Among media sites that target women with topics like fashion and gossip, Sugar Inc. and Glam Media, two other Bay Area startups, might seem attractive. But Yahoo and NBC already attract large audience with women’s properties like Yahoo’s Shine and OMG and NBC’s iVillage and Oxygen.
AOL recently bowed out of the sports-publishing business by doing a content deal with Sporting News, sidelining its Fanhouse site. But SB Nation, run by former AOL executive Jim Bankoff and backed by venture-capital firm Accel Partners, might find a home in another media empire.
The list goes on. Who’s next? Suggest your own deals in the comments.
[Photo: World Economic Forum]