February 07, 2011
Arianna Huffington: $300m in Cash, Hmmm, Let Me Think About That One
If you were Arianna Huffington, wouldn't you take the money, even if it meant a relocation to New York as a result? After all, with that kind of exit ($300 million of the $350 million is in cash), you can jet back and forth the 5 hour commute without that much of an inconvenience.
Besides, as part of the deal, she also gets to be in charge of Michael Arrington and his posse at TechCrunch, which should be interesting to watch from the outside -- personally and editorially.
As Kara Swisher points out in her write-up on the AOL acquisition, "the deal gives it a popular branded site that is very good at generating lots of page views and impressions very efficiently–which is the company’s whole thrust these days. That means lots more ad inventory to sell and an injection of content talent, giving AOL the scale it desperately needs."
The projections look good, so the acquisition is no surprise and frankly, many a conversation in my circles have revolved around who they'll ultimately sell out to over the past few years. They increased their ad sales from $ 31 million in 2010 to a projected $60 million this year. Sweet. I guess it was time to hand over the goods to a 'bigger power', at least on paper.
Let's face it, AOL's branding 'magic sauce' hasn't really taken a strong turn yet, so having both Huffington Post and TechCrunch under their wings, gives AOL editorial direction, identity and a sense of purpose, particularly in the eyes of readers and users who are not exactly living on the leading edge of technology.
With Arianna as Editor-in-Chief, things could get interesting....smart move on Armstrong's part. Her compelling combination of smart aggregated content with original content and celebrity names has become a winning formula others haven't been able to replicate.
As part of the deal, Tim Armstrong will take over from Huffington Post's Chief Revenue Officer Greg Coleman and the existing AOL ad sales head Jeff Levic will remain on board.
Paul Carr has an amusing and thoughtful take on the acquisition here. He talks about the potential downside of the SEO implications down the road for them (TechCrunch) and the rest of the world (readers). The other downside is that because Huffington Post doesn't remain solely independent, some things will no doubt have to give over time. Having Huffington in the editorial seat for now reduces the risk at least in the short term.
She will apparently be in charge of Engadget, Mapquest, TechCrunch and Moviefone. If its true that one reason they bought them is because their readers make up a significant number of important women with money to spend, then why not put her in charge of more brands?
Photo Credits: Planetpov.com, All Things D and Bloomberg BusinessWeek.
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