AOL buys the Huffington Post

[Callie Del Noire]

http://www.guardian.co.uk/technology/2011/feb/07/aol-buys-huffington-post-timeline

At first I was like. 'big deal'. Till I looked at the price. They are spending 40% percent of their capital for what is basically an oversized blog. Sorry. There is NOT ONE site short of a major news group like CNN, a major wire service (like Reuters), a internal level paper like the NY Times/Guardian/Washington Times that I would spend that much of my capital outlay for.

[Oniya]

It doesn't add much (if anything) to HuffPost's image.  AOLers used to be the 'annoying little brothers' of the Internet, and I'm not sure that's changed any.

[Callie Del Noire]

It doesn't add much (if anything) to HuffPost's image.  AOLers used to be the 'annoying little brothers' of the Internet, and I'm not sure that's changed any.

Ironically the negative impact I've seen is in the midwest 'red' states where the more liberal HP has hurt the AOL's dialup service with the more conservative groups.

[Funguy81]

This does not surprise me. Aol management have been screwing for the longest time. Its lost its appeal to most roleplayers now, and if it was not for a few people i still talk to on it, I would have deleted my screennames completely.

[Vekseid]

http://www.guardian.co.uk/technology/2011/feb/07/aol-buys-huffington-post-timeline

At first I was like. 'big deal'. Till I looked at the price. They are spending 40% percent of their capital for what is basically an oversized blog. Sorry. There is NOT ONE site short of a major news group like CNN, a major wire service (like Reuters), a internal level paper like the NY Times/Guardian/Washington Times that I would spend that much of my capital outlay for.

Looks like AOL got a steal, to me. Most transactions for megasites go for ~$30 per monthly visitor.

The Huffington post has a larger web audience than Fox does, and unlike Fox, the Huffington Post is actually showing consistent, stable growth.

In order to have a prayer of surviving, AoL needs to reinvent itself. Its dialup business doesn't have a future and AoL knows it.

I don't know if this will save AoL. They may at least be able to make a profit off of it, however.

[Huginn]

Although I am sure this has been in talks for ages one has to wonder at the timing with Obama sounding a death kneel for dial-up?

[Callie Del Noire]

Looks like AOL got a steal, to me. Most transactions for megasites go for ~$30 per monthly visitor.

The Huffington post has a larger web audience than Fox does, and unlike Fox, the Huffington Post is actually showing consistent, stable growth.

In order to have a prayer of surviving, AoL needs to reinvent itself. Its dialup business doesn't have a future and AoL knows it.

I don't know if this will save AoL. They may at least be able to make a profit off of it, however.

I don't see how this wil make them cash though, I mean the HP just collects articles from other sources mostly right? And their own articles have had some serious problems with impartiality and reliability of reporting right?

[Vekseid]

I don't see how this wil make them cash though, I mean the HP just collects articles from other sources mostly right? And their own articles have had some serious problems with impartiality and reliability of reporting right?

A small site whose primary audience is American and focuses on generating ad revenue can expect to generate about one cent per unique visitor per day. This is generally through Google, which takes a pretty hefty cut, and you are not getting focused advertisers, or advertisers who come straight to you.

Once you get to the size of Red State / Daily Kos, you will also start attracting brand advertisers interested in name recognition (this is of course smaller for locally focused sites). You have your own advertising program, charge your own prices, and do not have to go through an intermediary like Google, and even if you do, Google will give you a better cut to keep you with them. At an absolute minimum, this will double the above figure.

And then Arianna's site does that one better - it's nearly in the top 100 sites on the web, and looks like it will achieve that position soon, unless AOL's buyout pisses off progressives (which it might). Her audience is young, liberal, and tends not to be as engaged in television, meaning that she is an ideal site for brand advertisers to target.

I have no idea how much her site is generating in ad revenue. I would not be surprised if it was a six figure number, however.

So, enter AOL. Huffington Post's primary costs are probably bandwidth.

AOL can now provide her with said bandwidth for free through ATDN (AOL Transit Data Network).

This sort of thing is why the network neutrality debate is important. Glenn Beck attacks network neutrality, but the biggest network operators are not known for being conservative ideologues. They are, however, known for being rather liberal/progressive friendly. Not for lack of trying on Murdoch's part.

[Callie Del Noire]

And this is why I never understand the business model for sites like the HP. :D

[Vekseid]

It's probably best to think of the top 100-1,000 sites as major television networks. It's easy to think of "Oh HuffPo is just a blog" without realizing what being in that sort of class means when there are nearly two billion people on-line.

Edit: And I meant to say that I wouldn't be surprised if her daily ad revenues are in the six figure range.

[Callie Del Noire]

I guess this is another example of having questionable intergritity does pay huh?

(And no I don't think JUST the HP has that.. there are a lot of 'news' sites out there that I think don't have an ounce of integrity..and yes, I realize that makes me an idealist relic who is out of touch with the times)

[Vekseid]

There are several factors that work against people who want to maintain integrity

One is that it requires more investment - either in time or money. In the case of money, you break a story later. In the case of money, well, it's money.

Another is that companies pay for news about themselves and their competitors, either directly or through advertising.

A third is that controversy brings attention brings eyeballs.

I'm not sure where HuffPo's homeopathy bent comes from, for example. It might be money, it might be personal ideology on Arianna's part.

The most accurate news sources tend to be those written for people who actually expect honest reporting and will take the magazine to task if they don't (the Economist, for example), publicly funded (the BBC, etc.), or individuals familiar with a field discussing that field.

I think the last one - individuals discussing what they know best from their familiarity with the source, with aggregators picking out the most interesting bits - is going to dominate our news scene in the future.

[Sure]

The estimates I've seen are (in no particular order):
HuffPo: 133rd site in the world. About 5 million views per day. About $24,000 per day in ad revenue.
Fox News: 226th site in the world. About 3 million views per day. About $14,000 per day in ad revenue.
CNN: 52nd site in the world. About 20 million views per day. About $60,000 per day in ad revenue.
BBC: 41st site in the world. About 25 million views per day. About $71,000 per day in ad revenue.

[Vekseid]

Website evaluators are completely useless for pageview and revenue count and doubly so at that size. The only company that knows how much each of those is getting is Google. And they aren't talking.

[Sure]

True, but Ariana Huffington did say she expected her company to generate about 7.5 million in revenue annually when appealing for investment, so it fits fairly closely.

[Vekseid]

When appealing for investment? Are you talking about when she started the site six years ago?

Salon, a website roughly a tenth the audience of the Huffington Post, generates ~5 million per year in revenue. When Arianna was starting her site, Salon was making around 7-8 million.

[Sure]

She's asked for investment twice, once in 2006, once in 2008 (she got five and fifteen million respectively). I believe that statement was from the later. So it's not completely recent, no, but it's was also a plan looking forward from two to three years ago.

[Vekseid]

Her site is six times the size it was in 2008.

[Sure]

True. Advertising money is less reliant on size than what advertisers are willing to pay (4chan has a lot problems with this, I understand: it's a well viewed site but nearly nobody will advertise with them). Still, since AOL is publicly traded, I'm sure we'll be finding out more about the Post's revenues.

[Vekseid]

Huffpo probably charges CPM rates, so yes, for them, more traffic is more revenue. moot's difficulties in finding advertisers aren't really comparable - if Elliquiy is a non-adult site I would be able to get good advertisers too.

[Sure]

Really? There are standard rates for online advertising? As I understood it was like a lot of other advertising where each deal was more or less sui generis (to a limited degree, of course).

[Vekseid]

Most sites in the top 10k are able to name their prices, and they charge on an impressions basis, though they may market it as 'a week long run', 'month long run', etc. What advertisers are concerned about is impressions and unique visitors. The larger the site, the more they are able to set their own price.

Daily Kos, to pick an example, charges $1k per day for a single, rotating, ad run, in a similar market. They have several ad programs, and are roughly 5% of HuffPo's size, and go through BlogAds. They look to be earning about $3m/year in revenue. This is also roughly comparable to their size differential versus Salon.

Huffington Post probably charges $20k+/day for a single, full-site, prominent ad.



For adult sites, this gets turned completely on its head. The industry is littered with fraud, scams, and other problems. Google won't touch us, Yahoo won't touch us. My options are basically restricted to extremely shady companies, affiliate programs, or pennies that I will most likely never see. Moot breaks even with the penny route.

So I've gone the affiliate route. It makes a dollar a day. Other sites in my size range do 10-20 times that, but they aren't adult.

[Vekseid]

According to Bloomberg, HuffPo had $30 million in revenues last year.

Their traffic is starting about 50% higher this year than last year.