The Domino Effect of AOL-HuffPo
AOL’s $315 million purchase of the Huffington Post gets at the heart of the media industry’s existential question: Does the deal symbolize a shift toward valuing the quantity of content a media company creates rather than the quality?
To answer that query, it’s important to understand what AOL is really buying. HuffPo is known for being the left’s response to the Drudge Report. But what HuffPo has really excelled at is building a massive, Internet-scale audience. Launched in 2005, the site’s readership is already greater than the Washington Post’s and Los Angeles Times’. That is ultimately what AOL found attractive.
But who is that audience? What most people don’t know is that Arianna Huffington’s site grew its numbers by creating a huge amount of content. Supporters like to call this model “scalable content development,” while opponents call it “content farming.” Whatever the name, the model, at its most basic level, involves creating a lot of shortform content based on Internet traffic signals such as the number of searches for specific phrases on Google or trending topics on Twitter. It is designed to attract an audience by appealing not to a defined readership but to machines — albeit really important machines like Google that are capable of sending millions of visitors to a site. There’s little room in the model for what a real person might actually value.
So which sites will sell next? We’re already in the middle of a trend that appears to be valuing quantity over quality, at least online. Yahoo bought content farm Associated Content last year for $100 million, and the ad-driven content hub Demand Media recently completed a successful IPO that values the company at $1.6 billion. The AOL-HuffPo deal has triggered speculation that companies such as Glam Media and Gawker Media, garnering a lot of attention because of their large audiences, could be next.
With all of this deal activity, it may seem like the Internet has forever changed the media industry. But audiences and advertisers will eventually learn to find high-quality online media. Or maybe not. Either way, we will get the media industry we deserve.
Scott Albro is a digital media executive and CEO of Focus.com, a network of business and tech experts.