Some have also questioned whether acquiring a site with only $10 million in annual earnings for $315 million makes good business sense. But whatever the price, the move does seem to leave AOL well positioned as media looks to better monetize digital content.
At some point this year, The New York Times is expected to begin metered service for the heavier users of NYTimes.com, joining the Wall Street Journal in charging for online content. If the Times is successful, AOL could look at charging for Huffington Post content as well. Or, as Ken Doctor, media analyst with Outsell as well as the author of Newsonomics, points out to PRWeek, “AOL may be able to position itself as a major alternative, telling that audience why go to the New York Times when you can come to us for free.”
Doctor says AOL is primarily an advertising platform—with declining year-over-year ad revenues—and integrating the Huffington Post gives them a chance to attract a new audience and completely revamp its news production.
“I think you'll see them go through area-by-area, from tech and green life to entertainment and sports news, and decide what they're going to keep, what they're going to get rid of, and what they're going to combine,” he adds.
The big worry among loyal “Huff Po” readers is that the merger will cause it to lose its progressive edge. “There are some concerns about the political tenor editorially that may come with a takeover from AOL,” says David Lerner, president of New York-based Riptide Communications. “But my bigger concern is access-a lot of people we work with are already free bloggers on the Huffington Post and presumably will retain their role, but there could be changes among the editors. Of course that's what we do all the time in PR, make new contacts and reach out to new people.”
Though it is best known for political commentary, Lisa Kovitz, EVP/media strategist with the consumer group at Edelman New York, notes the Huffington Post has also shown surprising strength in lifestyle coverage as well.
“When Arianna Huffington started, she probably couldn't have envisioned a food tab, but their food tab is great, they have a green tab, a college tab, and they have Denver, New York, and Chicago tabs,” she adds. “The beauty has been the ability to micro-target an audience.”
Kovitz says she'll be paying close attention to how the merger impacts strong AOL news channels like finance as well as to Huffington's stated interest in creating, if not a TV brand, then a strong online video brand that can leverage AOL's still popular home page.
But for now, she argues, the merger and its timing are good for public relations. “The Huffington Post will have an even bigger megaphone that they had before and I don't think the model-which is focused on having reporters with a point of view-is going to change,” Kovitz says. “For our clients it's an opportunity, because you're not only getting the traffic, you're getting the backing of AOL and the things they've done well, such as Patch, the hyper-local blog that's great for grassroots campaigns.”