AOL to Acquire Huffington Post for $315 Million
NEW YORK -- AOL Inc. has agreed to acquire the Huffington Post for $315 million in another play to boost its standing in the online content space.
Arianna Huffington, the Huffington Post’s co-founder and editor-in-chief, will become president and editor-in-chief of the Huffington Post Media Group, which will integrate all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList and more.
The Huffington Post counts nearly 25 million unique monthly visitors, the firms said. "The transaction will create a premier global, national, local and hyper-local content group for the digital age – leveraged across online, mobile, tablet and video platforms," the companies said.
Their combined base of 117 million unique visitors a month in the U.S. and 270 million around the world will create a Web content powerhouse.
“The acquisition of the Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers,” said AOL chairman and CEO Tim Armstrong. “Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers.”
“This is truly a merger of visions and a perfect fit for us,” said Huffington, who attended Sunday's Super Bowl game in Arlington, Texas, with Armstrong. “The Huffington Post will continue on the same path we have been on for the last six years – though now at light speed – by combining with AOL.
AOL will pay $300 million in cash and the rest in stock in its biggest acquisition since its separation from Time Warner in 2009 and Armstrong's decision to super-charge the company's content offers to drive traffic and advertising dollars higher.
His team has recently also acquired tech blog TechCrunch and struck content deals and partnerships with celebrities, such as Heidi Klum, to expand its content's appeal.
According to the New York Times, Huffington and Armstrong began discussing a possible deal only last month. They quickly discovered that "we were practically finishing each other's sentences," Huffington told the paper and emphasized that her firm turned its first profit in 2010. "It was really amazing how aligned our visions were."
Executives estimate that the HuffPo will generate $60 million in revenue this year after $31 million last year, the Times said.
The paper also raised the questions though whether AOL will lose its reputation as being nonpartisan following the deal with the liberal HuffPo, and whether HuffPo can maintain its unique voice.
"The Huffington Post team has created a potent brand with the proven track record of knowing how to grow traffic, inform and entertain its readers and build a one-of-a-kind online community Add that to the powerful scale and resources of AOL and you have the perfect combination for today and the future," said Huffington Post co-founder Kenneth Lerer, a former executive vp at AOL Time Warner and founding partners of public relations firm Robinson, Lerer and Montgomery. "From local citizen reporting through AOL’s Patch, to The Huffington Post’s national reporting on politics, business and culture, consumers will have access to everything they want whenever they want it."
The Huffington Post is privately owned by its co-founders, as well as a group of investment firms.
The proposed transaction is expected to close in the late first or early second quarter.