Huffington Post and AOL: You've Got a Mess
AOL's pseudo journalism, Huffington Post's minuscule ad rates, and editors with big egos and a tough boss will doom the just-created media company. Dan Lyons on the disastrous deal. — It is no surprise that AOL is buying Huffington Post.
Context & Ripple Effects
The Huffington Post acquisition is the boldest move yet in AOL CEO Tim Armstrong's drive, laid out in coverage from December 2010, to transform the company into 'the king of content on the Internet' — a campaign that already absorbed TechCrunch in September 2010 and personal-profile startup About.me within days of its launch.
That buying spree has come with friction: sources flagged questions over Mike Arrington's future at AOL after the TechCrunch deal as an unconfirmed public sore point, and separate reports have floated a rumored AOL breakup or merger with Yahoo. Dan Lyons' column lands in that climate, arguing that AOL's own 'pseudo journalism,' Huffington Post's minuscule ad rates, and big-ego editors answering to a tough boss will sink the combination rather than save it.
First-order effects
- Huffington Post's low-cost, high-volume editorial model now sits inside AOL's content empire, and Lyons' argument — that its ad rates are too small to pay for itself — puts immediate pressure on Armstrong to show the math works where his earlier acquisitions have not.
- AOL inherits another founder-integration problem on top of the unresolved, still-unconfirmed questions about Mike Arrington's tenure post-TechCrunch, with Huffington Post's editors now reporting up through Armstrong's organization.
Second-order effects
- Rivals chasing the same content-king strategy — most directly Yahoo, already the subject of rumored merger-or-breakup scenarios involving AOL — face pressure to match a consolidated rival whose costs are anchored to Huffington Post-scale ad rates.
- AOL's own portfolio logic comes under strain: each new media brand added to the stable raises the question of which existing AOL content properties survive, and at what editorial cost.
Third-order effects
- If the pattern holds, the deal accelerates a structural test of whether scale plus cheap aggregation beats original journalism online — with legacy portals like AOL and Yahoo forced to consolidate or shrink rather than compete property-by-property.
The trend: Legacy web portals are racing to buy their way into relevance through content-brand acquisitions, betting that aggregated scale can replace the advertising economics their old models lost.