AOL to buy The Huffington Post for $315 million
AOL's still looking to shake its dial-up image from the nineties and move into 2011. The company hopes the purchase of The Huffington Post — and its new network of hyper-local news sites — will help the company into the realm of media and entertainment. David Gura explains.
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JEREMY HOBSON: If you’re like me, when you think AOL, you think dial up modems. Well today the company wants to show it’s still relevant, by buying The Huffington Post, for $315 million.
Marketplace’s David Gura is here live, with the details. Good morning, David.
DAVID GURA: Good morning Jeremy.
HOBSON: So, why is this happening now?
GURA: Ultimately the price was probably right. AOL is buying the company for $300 million in cash, $15 million in shares. The Huffington Post did make a small profit last year. It had predicted to make more money this year. Of course, we’re heading into an election, and for the left-leaning site, more political news will probably mean more readers. That said, the two companies may work well together. AOL has been investing recently in local content. It’s started something called Patch — that’s a place for hyper-local news. That could integrate nicely with The Huffington Post, because right now you get articles from politicians, big-name actors. On the news site you could read pieces from one of your neighbors or your mayor too.
HOBSON: And the The Huffington Post, I saw, already gets about 25 million visitors a month. Why does it want to be bought by AOL?
GURA: I talked to Claire Enders, she’s a media analyst in London. She says it’s a win-win deal for both The Huffington Post and AOL.
CLAIRE ENDERS: For Huffington Post it looks like there is no downside except possibly getting less of Arianna Huffington’s attention.
They’re going to get more money, more staff, and access to a bigger audience. The two companies are claiming they’ll have more than 400 million unique visitors every month. One of the most intriguing parts of all of this that Arianna Huffington is going to have a new role. She’s going to oversee ALL the content at AOL. The company has struggled make a name for itself to make its content stand out And the hope is with Huffington at the helm, they’ll be able to attract more advertisers.
HOBSON: Alright, Marketplace’s David Gura. Thanks so much.
GURA: Thanks Jeremy.