Los Angeles — In its second recent prominent media site acquisition, web portal AOL said tonight it has agreed to pay $315 million to acquire The Huffington Post, the influential news site co-founded in 2005 by Arianna Huffington and media executive Kenneth Lerer, and form a new media powerhouse by combining the content of both organizations.
In a shocking move, Huffington Post co-founder Ariana Huffington dispose of her site to AOL for $315m and becomes editor in chief of AOL’s new media unit.
The Huffington Post, the ground-breaking online news and opinion site, which began its operation in 2005 with a meager $1 million investment and has flourished into one of the most heavily visited news Web sites in the country, is being bought for $315m by AOL, in a move bound to stun new media skeptics and believers alike.
Huffington Post co-founder Arianna Huffington is to sell the website to AOL for a reported $315m and take a new role as AOL’s editor in chief. Photograph: Louis Lanzano/AP
The startling announcement was made shortly after midnight Eastern time in a news release published on the Huffington Post website, stated that the new media group is expected to have a reach of 117 million Americans and 270 million people worldwide.
“The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers,” said Tim Armstrong, Chairman and CEO of AOL said in the news release. “Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers.”
“This is truly a merger of visions and a perfect fit for us,” said Huffington. “The Huffington Post will continue on the same course we have been on for the last six years — though now at light speed — by combining with AOL.”
As part of the transaction, the ensuing new outfit, which will be managed by HuffPo co-founder Ms. Huffington, will be named “Huffington Post Media Group,” which will integrate all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and more. By doing so, AOL seems determined on convincing the world that it is deadly serious about reclaiming its place among the leaders of the digital media world.
AOL announced late Sunday that it has bought the Huffington Post for $315 million. (Credit: Huffington Post)
Further to combining the HuffPo, Engadget, and TechCrunch, the move will also add other AOL properties including PopEater, Mapquest, Moviefone, and others. All said, the idea is clearly that the group will offer content aimed at the widest-possible range of readers: politics junkies, techies, housewives, car enthusiasts, movie freaks, and more. By doing so, it will be well-positioned to take on the other leaders in the mainstream online media space, such as Gawker Media.
From AOL’s press release detailing terms of the deal:
AOL has agreed to purchase The Huffington Post for $315 million, approximately $300 million of which will be paid in cash funded from cash on hand. The Huffington Post is privately owned by its two cofounders, as well as a group of investors. The proposed transaction is subject to customary closing conditions, including receipt of government approvals. The boards of directors of each company and shareholders of The Huffington Post have approved the transaction. The transaction is expected to close in the late first- or early second-quarter 2011.
The deal with AOL marks a personal victory for Ms. Huffington, the colorful and controversial co-founder of the site that bore her name, along with Kenneth Lerer in 2005, said it had its first profitable year in 2010 and was poised to continue growing. Huffington Post executives estimate that the Web site will generate $60 million in revenue this year, compared with $31 million last year.
“This is the most exciting thing I have ever done,” Huffington said yesterday after the deal was first announced.
The Huffington Post has gained a vast reputation and is one of the most-read online properties, with its liberal approach to the news, attracting high-profile contributors from the worlds of politics, entertainment, women’s issues, and media along with 25 million monthly visitors.
In its February issue, “Vanity Fair” magazine reported on a lawsuit filed by two Democratic Party insiders who claim they were uncompensated and unrecognized co-founders of the hit blog. In the article, Huffington refused to comment, but in court papers was said to have denied the merits of the suit.
Lerer is a former executive vice president at AOL Time Warner. A news conference is planned for Monday morning to discuss the deal.
AOL founder Steve Case tweeted about the Huffington Post deal, saying: “Tim Armstrong says “1 + 1 will equal 11″…Really? That was not my experience.”
“The reason AOL is acquiring The Huffington Post is because we are absolutely passionate, big believers in the future of the Internet, big believers in the future of content,” Armstrong said.