Online company AOL Inc. says it is buying highly trafficked news website Huffington Post for $315 million in a deal that will put co-founder Ariana Huffington in charge of all AOL content.
Founded in 2005, Huffington Post now claims 25 million unique visitors a day. It is owned by Ariana Huffington, Kenneth Lerer and a group of other investors.
AOL will pay $300 million of the purchase price in cash.
Ariana Huffington will be named president and editor-in-chief of The Huffington Post Media Group, which will include all Huffington Post and AOL content, including Engadget, TechCrunch, MapQuest, Patch and more.
AOL finds itself in the rare position of selling less online advertising, while all around it major media companies are selling more. AOL’s problem is that it is still dependent on subscribers, those people who pay a minimum of $10 a month for dial-up service, to support its advertising business. AOL’s paying subscribers peaked at 26.7 million subscribers in 2003, but has now dropped to 3.85 million. That’s 86 percent fewer people looking at ads on AOL.
Mr. Armstrong is counting on The Huffington Post to lift online advertising by lifting traffic and page views. Eventually, AOL hopes to rebuild on this new foundation.
How does Ms. Huffington change that? Huffington Post is a master of finding stories across the Web, stripping them to their essence and placing well-created headlines on them that rise to the top of search engine results, guaranteeing a strong audience.
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