It's the LAST DAY to donate and pick up any of our thank-you gifts at a discount. 🔥 Give Now!

What does the merger mean for AOL, Huffington Post?

Jeremy Hobson Feb 7, 2011
HTML EMBED:
COPY

What does the merger mean for AOL, Huffington Post?

Jeremy Hobson Feb 7, 2011
HTML EMBED:
COPY

TEXT OF STORY

JEREMY HOBSON: The company that brought millions of Americans dial-up internet access in the early days of the web is making a $315 million bet on its future. That’s how much AOL is paying for the five-year-old left-leaning news site, The Huffington Post.

The deal was announced early this morning and let’s get reaction from Henry Blodget, the CEO of Business Insider. Good morning.

HENRY BLODGET: Good morning.

HOBSON: So let’s start with The Huffington Post, Henry. What’s in it for The Huffington Post to be taken over by AOL?

BLODGET: I think for Huffington it’s $300 million in cash, which isn’t probably looking too bad given that the site was founded about five to six years ago. And also just a much bigger platform. You can say what you like about AOL, but it has a huge group of readers and users and a big subscription business. And for Arianna Huffington that’s obviously a very big platform. And she’ll now be head of the whole content business.

HOBSON: And why does AOL want Huffington Post?

BLODGET: For AOL this is Hail Mary pass. If the company does nothing, it will go out of business slowly. And right now it is accruing a very big pile of cash because it’s still profitable. It has to figure out a business in the next couple of years, or it really is going to die. So basically it’s Tim Armstrong, the CEO, saying let’s make a big bold move, get a good new brand, and make a full bet on that.

HOBSON: Alright now obviously Huffington Post is a very popular website, but it’s also a politically liberal website. How does that figure into the calculation for AOL?

BLODGET: That’s going to be very interesting to see how that handle that. AOL right now is politically neutral, so given that Huffington Post is left-leaning, I would not be surprised to see them try to complement that with something on the right side because there’s no reason for them to take a political position as a media company. It’s possible that they now want to be a left-leaning media company. I don’t know, but that is an unusual and big question that’ll be going forward.

HOBSON: Henry Blodget, CEO of Business Insider. Thanks so much for your time thing morning.

BLODGET: Thanks for having me.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.