Huffington’s Heist
On Monday, AOL Inc. announced that it will buy The Huffington Post for $315 million. Paul Farhi at the Washington Post writes:
In effect, [Arianna] Huffington is taking over AOL.
A Reuters story by Anthony Boadle and Jennifer Saba properly questions the deal’s wisdom:
The move … comes at a hefty premium. AOL is estimated to be paying 32 times earnings before interest, taxes, depreciation and amortization for The Huffington Post, said Benchmark Co. analyst Clayton Moran. Similar content deals, such as Hellman & Friedman’s acquisition of Internet Brands in September 2010, typically go for eight to 12 times earnings, said Moran.
Based on conventional metrics, AOL is overpaying by roughly $200 million. Why?
Perhaps it’s because this deal looks like a bargain compared to other clunkers in AOL’s past. In 2000, AOL bought Time Warner for $162 billion. Today, after a near-total unwinding of that deal and more business missteps than can be counted, the company is worth $2.34 billion. Oops, make that $2.26 billion — the stock fell 3.4% on Monday on news of the HuffPo acquisition. In June of last year, AOL sold the social network Bebo, an $850 million 2008 acquisition, for the princely sum of $10 million. These guys still know how to pick ‘em, don’t they?
Matt Drudge is making an issue of the fact that HuffPo’s backers “had sought an exit.” Well, of course they did. That’s what venture investors do, either by taking a company public or by selling out to a larger firm. There’s nothing unusual in that. What is unusual is that AOL, which has been telling the public that it has “built a news operation that relies far less on wire reports and focuses instead on original reporting, analysis and commentary,” would want to associate itself with:
• An entity which, along with its principals, has been sued by a pair of former Democratic Party consultants who claim that Huffington and business partner Ken Lerer “stole their business idea.” It would be easy to dismiss the legal action as a money grab, but progressive co-plaintiffs Peter Daou and James Boyce are not minor actors, and at least on the surface their arguments seem credible.
• A CEO who “has been accused of lifting portions of a number of her books from other authors, and in one case had to dole out a 5-figure settlement to put plagiarism charges to rest.”
• Someone who appears to have started up her enterprise on false pretenses. Envirozealot Laurie David, a good friend of Arianna, has said that before the business began, “everybody was talking about the antidote to the Drudge Report, and from the very beginning she was thinking of that and so much more.” That’s interesting, because “in her initial blanket e-mail to recruit bloggers to the site, she promised it ‘won’t be left wing or right wing; indeed, it will punch holes in that very stale way of looking at the world.’” Late Monday evening, HuffPo’s home page featured very, very stale offerings from the left-wing likes of American Prospect co-founder Robert Kuttner, Co-Director of the Center for Economic and Policy Research Dean Baker, Democratic Congressmen Dennis Kucinich and Mike Honda, the aforementioned Ms. David, Brady Campaign President Paul Helmke, and “special admirer” of Bill Clinton Nina Burleigh. The only item I located coming from a clearly sensible conservative perspective was one co-authored by Reason’s Nick Gillespie and Cato’s Veronique de Rugy.
• An astroturfing activist chief executive who on impulse spent an estimated $250,000 so that 100 buses full of New Yorkers could attend Jon Stewart’s laughably misnamed “Rally to Restore Sanity” in Washington last October.
You are projecting and accusing Arianna of the same foul deed that you, yourself, would commit. I am confident that Araianna will, in fact, share the wealth acquired from AOL with ALL those who helped increase the value of HuffPo. She is not the kind of person who would stiff all the folks who helped her, volunteers or paid staff.
I urge all those who participated to raise a claim for compensation with Arianna. And, if you are reluctant to ask for your share from a left-wing fat cat, demand as you would from Bush, Rove or an evil corporate officer. Ask/demand your fair share from Arianna; I know she’ll respond appropriately.
Oh, yeah; guess again my friend.
Crooks and criminals know “very well” how to respond indeed – Chicagoland style.
Besides, all that “AOL money” is “Obama money” or “stimulus money” to come back to Obama from Arriamba come 2012.
Hey, she put out Free, Starry-eyed Help Wanted signs and people applied. What’s the problem? It’s what “socialists” all do, well, at least the elite one’s who get to run the show.
“This column will probably be one of the few places where you will see anyone question how Arianna Huffington and her investors can sleep at night with even more millions of dollars stashed safely away, knowing that they achieved their gains largely on the backs of free, starry-eyed help.”
Money-filled mattresses are quite comfortable.
Damn funny. Even after Araianna turned her husband gay and herself supposedly liberal, she retained her love of money. She just moved up considerably in the limousine liberal hierarchy.
She turned her husband gay ??? C’mon dude, get real.
C’mon dude, can’t you take a joke?
Arianna Huffington — who once owned up to her conversion from conservative to liberal — described her metamorphosis this way: “I’ve been radicalized.”
If she meant that phrase to be synonymous with this one: “I’ve been bought,” then I’d agree.
For millions of dollars in cash from leftist investors (very little of which she shared with her website’s content providers), she discovered her political views to be “flexible.”
The same seems true now, with the hint of yet another move — this time to the political center, a place AOL deems the greatest audience potential to be.
you cannot steal and still call yourself a conservative but as a liberal …heck no problemo
You must understand, liberals[?] are different, the rules and guides to human conduct are not for them. Consequently there is nothing they won’t discard or contradict themselves on. Best part is, they don’t know they doing it even while doing it, they still talk of the poor and downtrodden and believe themselves superior.
Sometimes it helps being nuts.
Right on johnt!
Ariana needs to spread the wealth around because at some point you have made enough money. The benefits cannot just translate into greater profits and bonuses for those at the top. They have to be shared by American workers.
“Starry-eyed Help” AKA Useful Idiots.
Arianna’s favorite book must now be “So Long and Thanks For All the Fish!”, the fourth book in the innacurately called Hitchhiker’s Trilogy by Douglas Adams. Because that is essentially what she is saying to all of her minions who did the actual work gratis. Also the term “useful idiot” comes to mind.
What I don’t understand is how AOL could view this as a good purchase. I have a hard time seeing that all of those volunteers are going to be so enthused about supporting a profitable enterprise when they don’t share in the profits. This is good news for conservatives, because this blowhard aggregation will collapse into a bunch of non-profitable blogs lacking a national reach.
AOL is making the same mistake Rupert Murdoch made when News Corp. overpaid for MySpace.com. They apparently think that Arianna is the Huffington Post, and, like MySpace, it’s the portal that matters, not the content. But when you have a portal that’s almost entirely based on the content of people who are not only being paid nothing to produce it, but are not under contract to produce it, there’s no way to make them keep producing content for you — they’re free to quit or bring their unpaid services to another website. Rupert found that out when the millions who were posting on MySpace gravitated over to Facebook and Twitter.
Since a lot of the cache about the HuffPo to it’s liberal content providers was the idea of being hip, cool and stbthe cutting edge of bringing progressive citizen journalism to the masses, and since AOL is about the most uncool, unhip web portal on the planet, this does not figure to go well for the company. The suckers are now aware they were used to make Arianna and a few select HuffPo workers millions, and are open to being wooed to whatever new or current website can woo them with the promise they won’t be jilted for the evil capitalist dollar (and it’s the HuffPo’s base of anti-big business bloggers that made them susceptible to being played for chimps by Arianna in the first place, and so hurt now that they found out that their Zsa Zsa of the left never really lost her taste for income inequality).
You have a point about how easily the contributors can move to another site, in fact a lot more easily than moving from one social network to another, but I don’t think you’ve made your case that they’re likely to do so, as long as they think they’re “changing the world” or whatever is the current popular phrase for that. Might happen if e.g. AOL takes a ham handed approach towards them, condescends to them, etc. etc.—and that’s often the way to bet in an acquisition—but it’s not a sure thing.
So…the Huffington Post is truly a communist enterprise masquerading as a capitalist venture?
I am not surprised by the hypocrisy. Michael Moore is being “greedy” in wanting to get paid, Al Gore wines and dines without worry of his carbon footprint, unions agitate for higher wages but are loathe to pay their own above minimum wage, and Michelle Obama eats like a pig, but then demands restaurants watch what they feed children. But, hey! people call this a political philosophy so who are we to argue?
Unions also agitate for any business (no matter the size, public or private) to be unionized, but fire any of their own employees who want to unionize.
It’s the liberal way. . . . .
From each according to their ability…
You forgot the second part, “to each according their rank!”
That’s interesting, because “in her initial blanket e-mail to recruit bloggers to the site, she promised it ‘won’t be left wing or right wing; indeed, it will punch holes in that very stale way of looking at the world.’”
Anyone from the right wing side of the aisle who has either read or commented on HuffPo can testify to the veracity of the above statement.
Well, let’s hope AOL will be more receptive to contrary opinions, as published inadequately now in HuffPo’s readers’ commentary sections. Those sections are often much more readable and interesting than the articles themselves. But mostly one-sided commentaries? Of course. Why’s that? One, most readers favor the liberal left side of politics. Also, from first-hand experience, I can say that Huffpo dislikes contrary commentary. I was a contributor for over a year and drew frequently violent reactions from the majority lefties. It was fun, to say the least. Then last fall I was notified I was barred from further commentary and my extensive collection of responses and chats with other contributors on the website was abolished. With no forewarning, I was forever “banned.” Boo-hoo.
As a conservative, maybe I should consider that a badge of honor: “Banned by Huffpo.” Nice sound. But since Huffpo is now history, maybe we specifically banned respondents should band together and seek dedicated space on whatever site AOL adopts. Wouldn’t that be fun.
This can only hurt AOL. Libs who use the site, will stay around, whereas Conservatives like me, cannot change our address quick enough.
I fail to share the indignation, sorry. HuffPo provided a forum where those of liberal persuasion could vent, protected from factual rebuttal by mean, nasty libertarians, conservatives, or Tea Partiers. They obviously didn’t expect to be treated fairly, and have no reason to be disappointed.
Liberals are fine with appropriation of the work of others. It’s what they do. Their comments were taken. What is the problem? They’ll take your money.
Arianna proves that money speaks louder than words. When it’s our money, we’re all conservatives. How about an expose of how Warren Buffet’s Insurance companies benefit from the estate tax? Some people thought he was an exception. Some people learn slowly.
Isn’t it amazing and touching how the Limousine Liberals always manage to take care of one another? For politicians who get voted out of office they get things like six figure fees for giving a twenty minute speech somewhere (can you say Bill Clinton?). Others get great deals like A. Huff, or get great jobs sitting on a board of directors for a non-profit.
A real cynic might think that a lot of these things are just sham transactions so the recipients don’t have to pay gift taxes.
Well I for one am shocked.
I had no idea there was so much money to be made in left-wing propagandizing.
How did Air America go out of business if there is this much coin to be had?
They had a bigger vacuum cleaner sucking up the “supply” of liberal cash….
AOL is a cover, a front if you wish, for BHO destined cash.
I think you are on to it.
I think that the HuffPo is a national treasure. It is a site that has suckered our elites into publicizing to the world how crazy, nasty, and ignorant they are. It has been an education. And now comes Arianna’s triumphant finale, the moment that the curtain is drawn back and she reveals to her posters and their followers that they have been had.
Hats off, gentlemen, a genius.
Silly article. How does it get the economy moving again and create jobs?
#14 Mark D.: “Liberals are fine with the appropriation of the work of others. It’s what they do….” Conservatives do the same thing. Here in Colorado last year, the gubernatorial campaign of conservative Republican former US Rep. McInniss collapsed over a major plagiarism scandal.
As a result, we got an inept unknown Tea Partier as our Republican nominee with one-issue Tom Tancredo running as a candidate of the American Constitution Party. The Democratic nominee strolled home to victory.
Plagiarism only works for Democrats. Ask VP Joe Biden if you don’t believe me.
she pays double taxes and all her personally property goes to
castro bros. llc.
@SteveB,
Oh yes, Republicans have plenty of thieves in the ranks as well. One need look no further than the jail cell housing Duke Cunningham…. The Democrats seem, for some reason, to be more likely to avoid punishment.
I don’t seek to anoint conservatives. I merely point out that it is not their party line to redistribute the wealth. If one belongs to a group that promotes taking to give to others, one can hardly protest when one’s freely given words are taken. Not without looking foolish or hypocritical.
Huff&Puff has a long history of banning conservative participants, myself included. However, AOL is a dog waiting to die. Whoever is funding this is a damn fool.
The same person that paid for the buses for Stewart….SOROS. He has been helping Adrianna for a long time.BUT I noticed on a fox interview that she was moving to the centre for a while( probably just for the day ).
Hugo Chavez, Fidel Castro, Arianna Huffington – what’s the difference? All of them are sanctimonious lefties who hold forth on the virtues of socialism and shared sacrifice so long as they can manipulate and steal for themselves. She must have had a psychotic break way back when because there are many of us around who remember her sucking up to Gingrich for the chance for some face time. Must be when she saw his star setting, she flipped out and decided to join the the new club in her fantasy town. She is such a colossal fraud,such a liar, such an opportunist that for anyone to take her seriously calls into question their sanity and integrity. By the way, getting e-mails from people all day telling me they have dropped AOL from their e-mail. I’m about to do the same. No way would I have anything to do with that company after they just acquired an entity whose putative founder is hostile, hateful, loathsome, and has gotten rich spreading vicious lies about those whom she disagrees with. At least in this century.
I hope the backroom crew form a union and demand back wages. Only seems fair…time to redistribute the wealth.
Yep! Time to redistribute HuffyPo’s wealth.
It seems all her consultations with her “spiritual advisor”, Jolly Roger, or whatever his name is have come to naught.
“they achieved their gains largely on the backs of free, starry-eyed help.”
I am not going to shed any tears for the free, starry-eyed help. They got what they deserved.
My experience in trying to comment at HuffPo was that comments with a conservative view had a good chance of being rejected. Once someone who is conservative learned that, there was not much incentive to bother commenting. The result was comment streams that very one-sided, which helps convince the loony-left commenters that they were smart since so few dispute what they have to say.
I agree. In the past when I posted, it was 50-50 whether it would actually appear.
The glorified moderators are all basically leftists, so if you aren’t one also, its tough to even get published. …and it does create a false sense for those on the left, that everybody must agree with their brilliance.
…as I think about it now, I don’t know why I even wasted my time. I guess I just liked tweaking the noses of the nitwits.
The slogan for American Leftists like Huffington, Maher, Moore, Gore, Clinton, Obama & Pelosi:
“From each according to their naivete, to each according to their greed.”
No one forced those useful idiots to wh*re out their talents. But I do love the irony of Huffy being the rabid capitalist she supposedly hates.
“Behind every great fortune is great crime,” someone has said. I’m less outraged by her business practices (which sound about par for a rich political player to me) than I am worried she will be a media success and help re-elect Obama in 2012. That’s what needs to be countered. How can we beat her?
I’d be interested in seeing how much Huffington actually owned of her website. While libs may have ponied up the dough if it went to three sets of financing (exclusive of the intial Angel) they didn’t do it for laughs. It’s been my experience that when you go to the well that many times that the money men demand (and get) bigger and bigger pieces of the pie. If the third stage was 25 million I would imagine that Huffington became a minority shareholder.
scr_north:
You are correct of course about the dilution of her ownership interest.
Drudge is saying that she got $18 million, which means she owned about 6% at the time of the sale. Not bad for from all appearances not putting up any money herself. She’s also getting a CEO salary of $4 mil per year at AOL.
Hi Tom, thanks for the info. Wow, 6% eh. That’s gotta sting even if she didn’t do a whole lot. I wonder how long the honeymoon with AOL will last when they fully realize that she just may not know what she’s doing.
if I were writing for a site for free and that site were suddenly owned by a large corporation I would be expecting a paycheck….I’ll wager you two of obama’s cigarettes huffpo dies….
Oh, my, where to start on this? As a professional “content provider,” the New Media version of the stringer reporter, I’ve been watching AOL with interest for years as they struggled with the concept and the reality of creating web content. Not long ago, they decided they had to compete with Yahoo (who bought out Associated Content for less than a third of Huffpo’s apparent value) and eHow (content provided by Demand Studios Media, who just released an IPO valued at I believe $100 million). Their answer was Seed, a platform that requested competitive on-spec content and paid up to $1000 an article, amazing money for online writers.
Well, Seed opened to a lot of buzz in my world, but has lost more and more credibility as good content writers wrote articles that went nowhere; no one seemed to know anyone who was making money on it. Meanwhile, we all know there’s sure money writing for Demand and Associated Content and BrightHub and WiseGeek – less money per article, to be certain, but a guaranteed paycheck for writers with some skill, and enough work to make a decent living. I think Seed kind of crashed and burned – AOL was paying far too much money for content, yet demanding far too much work from freelancers with the skill to create it.
It is no surprise, really, that AOL has returned to its original model of free-labor content. Remember their channels run by hundreds of volunteers, discarded a few tears ago to the dismay of people who had built reputations up on AOL for over a decade? HuffPo seems to have the same business model – low-cost web content developed by dedicated volunteers to whom they owe nothing, not even gratitude.
But the kicker is this: as more and more paying content providers open up – and I’ve seen several good ones created over the last couple years alone, not to mention the big sales and IPOs – the volunteers (aka “suckers”) will get out of college and figure out that they can make actual cash money writing web content. They will become professional content writers for other outlets and HuffPo will have to work with new green volunteers in an ever-cycling mill. Some will stay, and politicians will always be happy to write (or have written for them) columns to toss out there. But in the end, it is not a sustainable business model.
Bye-bye, HuffPo and AOL. It was an interesting show.
The reward for a crook and the crooked is often exactly what they thought they wanted so much so as to be crooked in word and deed to get it.
To destroy a person turned to evil all that is needed is MORE MORE MORE, like a balloon will burst, or the horde feasts until death by gluttony.
Another view: Feed the murderer come to your door and his murderous impulse passes, if the meal is filling and tasty, he blesses you.
Nothing to see here folks. Move along. Another foolish old man with money hooked up with a gold digging babe. We all know the outcome. AH is the same sort of woman as that blond bimbo who hooked up with the ancient oil tycoon ( Geez, what WAS her name anyway?) Just another Jezabel.
Scottie, using the word “babe” to describe that lisping old shrew is not acceptable.
This has the look and smell and feel of a scheme to move as much money out of AOL as possible under the guise of a merger before it tanks. The Feds should take a long, hard look at this deal…