JEFFREY BROWN: And finally tonight: a surprise marriage in the world of technology and media. AOL announces it will buy The Huffington Post for $315 million.
AOL has struggled to move away from selling online access, the service for which it first became renowned as an Internet pioneer. Trying to remake itself as a broader content company, it recently purchased sites including the locally focused Patch.com and the technology blog TechCrunch.
But today’s move is AOL’s biggest by far. Just 6 years old, the Huffington Post has become one of the Web’s most popular news and opinion sites, known for its liberal commentary. It reaches more than 20 million unique visitors a month with material aggregated from other sources, as well as original stories by its own journalists.
(CHEERING AND APPLAUSE)
JEFFREY BROWN: AOL merged with Time Warner at the height of the tech bubble. That deal was widely considered a failure, and the two companies formally separated in 2009.
And joining me now from New York are AOL CEO Tim Armstrong and Arianna Huffington, founder and editor-in-chief of The Huffington Post.
Tim Armstrong, you have had declines in revenues recently, declines in ad sales. Ken Auletta of The New Yorker, who helps us out often on media issues, called this purchase — quote — “a Hail Mary pass to demonstrate that AOL could mount a comeback from the near dead.”
Is that what this is?
TIM ARMSTRONG, AOL: No.
I have — well, I have known Ken for years, and I think that we probably have a big difference of opinion. I think today is a great day for the future of AOL. I think it’s a great day for Huffington Post. And, you know, we’re able to serve 120 million users roughly in the United States, 270 million globally, with great content from The Huffington Post, as well as our properties.
And we are big believers, in the next phase, the Internet is about content. So, I think today is a monumental day for us on strategy, on point with what we said we were going to do a year-and-a-half ago, which was to turn AOL into the next American content company and global media company. And I think today is a step in that direction.
We’re also incredibly excited to be joined by Arianna Huffington, who I would consider to be one of the most talented people in the media space and a great female entrepreneur for the Web.
JEFFREY BROWN: Well, Ms. Huffington, what do — what do you get out of this? You — you take over control of all editorial content, I gather. You already have that at Huffington Post.
What do you get from this?
ARIANNA HUFFINGTON, The Huffington Post: Well, this is an amazing merger of visions.
What Tim wants to do with AOL and what I have been wanting to do at The Huffington Post can now be dramatically accelerated. It’s a little bit for us as though we are getting off a fast-moving train and getting into a supersonic jet.
It’s amazing to see the work, for example, that we can now do on the local space, the global space, around engagement, the women’s space, and with original reporting. These were our highest priorities for 2011. Now we can work on all of them all at once.
Just to give you one example with local, Patch.com, AOL’s local initiative, is in 800 towns, with professional journalists covering the stories, reinventing local reporting, focusing on volunteer opportunities and community solutions. That’s incredibly important at the moment.
Especially as large numbers of our citizens are losing trust in national institutions, to be able to empower them through focusing on what is working at the community level is key and a major opportunity for us as we are looking at our coverage of the 2012 elections.
JEFFREY BROWN: Well, Mr. Armstrong, to play devil’s advocate here, does AOL risk something to its brand by partnering with Huffington Post, given its — its reputation as a liberal, left commentary site?
TIM ARMSTRONG: I think, first and foremost, I think Arianna has moved that brand well beyond that description. And I think kind of going beyond left and right is the tagline, I think, Arianna talks about.
But, more importantly, I think we have a stable of brands at AOL. And I think Huffington Post, we’re renaming the stable of content programs The Huffington Post Media Group, of which Arianna will be president and editor-in-chief. That stable of brands includes TechCrunch and Engadget, and Moviefone, MapQuest, and Patch, and all those things.
And I think, from a standpoint of editorial, you know, AOL historically has played in a very deep way across many different verticals in the content space. Huffington Post adds a very large new dimension to that.
But my guess is, Arianna has the same interests we do, which is serving consumers’ needs and going beyond the — the just straight political needs of people. And I think the majority, 85 percent, of Huffington Post content at this point is not driven around politics.
So, I think you’re seeing the creation of the next highly interactive, highly social and future media company at AOL.
JEFFREY BROWN: Well, but, Ms. Huffington, whether it’s 15 percent or more, I mean, how do you negotiate this new position? Do you now worry more about political views, getting other views on there? How do you deal with that?
ARIANNA HUFFINGTON: Oh, not at all.
This has been my position for years now. I have talked obsessively — sometimes, I’m tired of hearing myself say — it’s time for all of us in journalism to move beyond left and right. Truly, it is an obsolete way of looking at the problems America is facing.
What’s happening to the middle class, what’s happening in our foreign policy in Afghanistan are not easily divided into left-right positions. People have different positions across the political spectrum. All voices have been welcome at The Huffington Post. People ranging from Newt Gingrich to David Frum and Joe Scarborough and Tony Blankley have been blogging on The Huffington Post.
So, that is simply not at all what we have been providing. On top of it, we have been covering 26 other sections, including living, entertainment, college, books. Divorce was our 26th section launched a few months ago.
So, our interest is in providing everything that consumers need and doing it in a way that gives not just data, but stories.
JEFFREY BROWN: Well — well, Mr. Armstrong, the — of course, the larger issue still is, how does anyone make money on the — on the Internet?
Does this — AOL still has its subscribers, of course, for its old services. But that can’t last, of course, I suppose. So, does this come down to all the marbles on ad revenues, getting as many eyeballs to the site as possible with ads?
TIM ARMSTRONG: Yes, look, I think the ad marketplace for the Internet is going to be a tremendous growth source for the next couple decades.
And if you look at what customers want — and we spend a lot of times with customers — we got a lot of feedback, both Arianna and I, today from some of the largest customers in the world — they want the Internet to have engaged content and engaged platforms that really are community-driven, social-driven, national, local.
And I think a reliance on advertising is actually a reliance on a natural migration that’s happening to take advantage of that tailwind we have behind us. And I think our model right now is great content with great ads.
We see the Internet needing to have a cleanup of how it looks and feels in the next progression of it. It hasn’t changed much in the last 15 years. We’ve launched a number of different initiatives to clean up not just the content areas, but also the advertising area.
We launched Project Devil last September, which is the most aggressive brand advertising play on the Internet. So, if you’re a large brand globally, and you want to connect with great audiences, deep, rich content, and — and fantastic, creative, I think the combination of AOL and Huffington Post will be the absolute leader in that space.
JEFFREY BROWN: All right, we will see what happens.
Tim Armstrong and Arianna Huffington, thank you both very much.
ARIANNA HUFFINGTON: Thank you.
TIM ARMSTRONG: Thanks for having us.