CEO Tim Armstrong, Arianna Huffington Reveal AOL’s Ambitious Hollywood Strategy

The following story appears in the upcoming issue of The Hollywood Reporter magazine on newsstands Thursday.

On the set of a photo shoot at a Los Angeles studio, AOL CEO Tim Armstrong settles into salesman mode, explaining how a strategy laser-focused on content will turn around his troubled Internet giant. He adjusts his sturdy 6-foot-4 frame and begins rattling off traffic figures, audience metrics and potential cost savings without so much as flinching.

He'd willingly go on, but Heidi Klum -- one of AOL's newest celebrity acquisitions -- has come bounding out of her dressing room in impossibly high YSL heels and is already critiquing his look as though he were a contestant on Project Runway. She persuades him to remove his suit jacket, unbutton his dress shirt and shed the powder-blue Hermes tie. "Come on, you can't be too stiff," she chirps in her endearing German accent. "It's Hollywood." Then she turns to the photographer shooting the pair with AOL's newest executive, Arianna Huffington, for the cover of this magazine, "Are we cute?" She puckers her lips. "Are we Charlie's Angels cute?"

No doubt, it's a new culture for Armstrong, who has spent the past decade-plus ensconced in a far more corporate world. But it's one the 40-year-old executive will need to get comfortable with as he continues his aggressive push for more partners like the supermodel/reality TV star. Hollywood now is an integral piece -- in fact, the most important piece - of his premium-content strategy to revive the much-maligned Web company he took the reins of two years ago.

During the past eight months, even before his $315 million acquisition of the Huffington Post was announced Super Bowl Sunday, he has brokered content deals with everyone from Klum, Gisele Bundchen and the Jonas Brothers to Mark Burnett, Ben Silverman and Michael Eisner's Vuguru. AOL signed to cross-promote Ellen DeGeneres' site and will soon roll out a late-night video block featuring highlights from the podcasts of Kevin Smith, Adam Carolla and Kevin Pollak. Now, The Hollywood Reporter can exclusively report that the company will add Queen Latifah to its roster. Beginning in the spring, she will produce and star in Web series about sports, entertainment and entrepreneurialism. Huffington, co-founder of the Huffington Post, will oversee this and the site's content.

Tim Armstrong (Getty)

To hear Armstrong tell it, these boldfaced names are the future of the Web. And like every studio chief in town, Armstrong is banking on stars. "The first phase of the Internet was about access, and I believe AOL was the biggest player in that phase. Then the next phase has really been about the platform, so you've seen Apple, Google and Facebook there," he says. "But the phase after this is going to be more of the Hollywood phase, where it's about content, creativity and really putting a human face on the Internet."

If this sounds like a story you've heard before, it's because it's very likely you have. The big sites like AOL have been trying to find a way to make money off of Hollywood for the better part of the past decade. You might recall the Lloyd Braun-Terry Semel era at Yahoo, when the Web behemoth was convinced the creative community was its ticket to heaps of ad revenue -- until it abruptly decided it wasn't and the company quickly latched on to the next strategy. Or perhaps when AOL gathered about 500 potential Madison Avenue buyers into Manhattan's opulent Time Warner Center to highlight its second installment of Burnett's interactive series Gold Rush, along with other ad-supported projects from DreamWorks Animation, Telepictures and Endemol. That was in 2007.     

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