‘A Big Pile of Cash’ and Content: What’s at Stake in Huffington Post Purchase

BY Mike Melia  February 7, 2011 at 5:46 PM EDT

AOL Inc. announced Sunday night its plan to buy The Huffington Post for $315 million. On Monday’s NewsHour, Jeffrey Brown will discuss the details of the deal with AOL CEO Tim Armstrong, and Arianna Huffington, co-founder and editor-in-chief of her namesake news site.

The sale is another attempt by AOL and Armstrong to invest in online news content creators, having already bought TechCrunch blog and 5Min Media last year, in addition to funding Patch, a site for local news reporting. “What they [AOL] are trying to do is show they are a player for online only premium content and monetize it,” said Jeff Bercovici of Forbes told the NewsHour. “For AOL, it is a lifeline and way to hop from the sinking raft they are on to the one that has more buoyancy.”

“AOL gets a new media site that’s hot and that has real good demographics,” said Ken Auletta of The New Yorker. “AOL’s purchase of The Huffington Post is the equivalent of a fourth-quarter Hail Mary pass,” Auletta wrote in a blog post Monday.

“I think a big part of this is their [AOL's] business is dying,” said Felix Gillette of Bloomberg Businessweek. Asked what’s in it for The Huffington Post: “They get a big pile of cash,” Gillette said.

Under the agreement, Arianna Huffington will take charge of all of AOL’s news content providers and become president and editor-in-chief of the new Huffington Post Media Group.

For more on the deal, watch Huffington and Armstrong Monday on the NewsHour.