Since AOL acquired the Huffington Post, its stock price has been hammered, losing 50% of its market value. Yesterday after the company released earnings, owners of the stock gave up on the company. The firm lost more than 26% of its market price in a single trading day. The stock closed at $11.10 per share.
Part of the problem was in plunging advertising revenue. Huffington Post was supposed to breath life into the sagging internet company. But so far there have been no positive results, only losing numbers. Revenues for the quarter fell 8.4%.
As one analyst explained yesterday, “its overall revenues fell, to $542 million from $592 million in the same quarter a year ago — a performance that also came in below most Wall Street estimates.”
The marriage between HuffPo and AOL was regarded by many as a last desperate move by the former internet giant to revive its fortunes. But it does not appear that the partnership has helped the company with traffic and ad revenue.
At least one analyst believes that at a relatively cheap price, Time Warner should buy back the company and dump HuffPost. Noted analyst Peter Yard from Venture Beat “If you were betting on the future of news, would you pick Time or HuffPo? Time Warner is going to have to make a move here, and AOL just got a whole lot cheaper than Say Media or Glam.”
HuffPo was nothing but a gimmick traffic generator. And a gimmick that was bound to annoy people no end. I personally refuse to give them any traffic whatsoever even if there is a link originating from an excellent site like PJM. Their keyword shenanigans are insulting to say the least.
Investors should be demanding the heads of AOL executives.
One thing that no one seems to have thought of is that people who still use aol tend to be older and somewhat more rural. We first got on aol in 1998, it was the only hosting service that waas not long distance from our house in the country that had unlimited access. So we stayed with it for almost 13 years, even as leftist as Time Warner was. Finally they beccame part of HuffPo, even more leftist.
We could not really affrd the extra cost per month to the new service but here we are, away from HuffPo. I do not believe we are alone.
Couldn’t happen to a nicer bunch.
But Arianna did get her cash out of the deal, right? Whew! Well that’s all that matters.
From a stock portfolio perspective, I’d be doing shorts on both.
Wow – that’s a waste of cash. I think it’s all over for AOL. The Huffington Post is the biggest casualty here. It’s dead. I can’t see anyone buying it from AOL – even for fire sale prices. TechCrunch may find a buyer because it’s cheap to run and has a highly targeted/coveted audience.
http://mankabros.com/blogs/onmedea/2011/05/04/the-huffington-post-is-dead-r-i-p/
AOL also purchased a liberal base when they bought the HuffPost. They then proceeded to insult them with blog acceptance policies which are highly subjective and impossible to summarize but amount to an assault on a lot of tender egos. What kind of business model destroys a relationship with its customer base? Answer: An unprofitable one.