AOL Buys HuffPost for $315 Million

AOL has agreed to buy fast-growing US-based news site The Huffington Post for $315m including around $300m in cash.

Most of the cash will go to co-founders Arianna Huffington and Kenneth Lerer, and Huffington will become President and Editor-in-Chief of the combined firm's content division - the latter includes sites like Engadget and Techcrunch and will now be known as The Huffington Post Media Group.

The 'HuffPost' was started only in 2005 and has become one of the country's most visited news sites, with a pioneering attitude to new technologies and formats. This has included research and analysis applications: last July, it acquired opinion poll platform Pollster.com from YouGov Polimetrix with the aim of using the site's polling, analysis and commentary to complement its own political and election coverage; and the previous month it bought sentiment analysis firm Adaptive Semantics.

AOL, which has seen rapidly declining subscription and advertising income (overall revenue was down 26% in Q4 2010), has been keen to build up its media and entertainment portfolio under the leadership of CEO Tim Armstrong. The online giant says the deal creates a media group with 117 million US visitors a month and a global reach of 270m.

The deal has been approved by both boards and by Huffington Post shareholders, but still needs government approval.

Huffington said in her blog that her New Year's resolution for 2011 was to take it 'to the next level - not just incrementally, but exponentially'. Until now, this appeared to mean organic expansion into more local news coverage and more international content, starting with HuffPost Brazil; as well as more original video content.

Today's announcement changes speed but not direction according to Huffington, who compared the moment to 'stepping off a fast-moving train and onto a supersonic jet.' She comments: 'We're still traveling toward the same destination, with the same people at the wheel, and with the same goals, but we're now going to get there much, much faster.'

AOL owns a network of ethnic and entertainment blogs, a local news operation Patch.com and new video-production studios. Says Huffington: 'By combining HuffPost with AOL's network of sites, thriving video initiative, local focus and international reach, we know we'll be creating a company that can have an enormous impact, reaching a global audience on every imaginable platform.'

The deal is expected to close in March or April 2011. In a joint statement the firms said: 'The combination of AOL's infrastructure and scale with the Huffington Post's pioneering approach to news and innovative community-building among a broad and sophisticated audience will mark a seminal moment in the evolution of digital journalism and online engagement.'

Web sites: www.aol.com and www.huffpost.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.