AOL Buys Huffington Post — What Now AOL Music?

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I think this is going to be a situation where 1 plus 1 equals 11” — Tim Armstrong, AOL Chairman & CEO to the NY Times.

AOL to Buy Huffington Post; Tim Armstrong says “1+1 will equal 11″ Really?? That wasn’t my experience” — Steve Case, founder of AOL & former Chairman of AOL Time Warner on Twitter last night.

“To the optimist, the glass is half full. To the pessimist, the glass is half empty. To the technologist, the glass is twice as big as it needs to be” — Unknown.

On Sunday night, shortly after the Green Bay Packers vanquished the Pittsburgh Steelers in Superbowl XLV, the NY Times reported that  AOL had purchased The Huffington Post for a cool $315 million. Arianna Huffington will be in charge of all AOL content.

NPR  & Kara Swisher (From All Things Digital) weigh in here:

The Huffington Post is very good at creating a very exciting aggregation play in news, and they’ve started to do original journalism on the site,” she said. “What [the deal] does say is that news is an exciting area and it always will be. It just depends on how it’s going to be distributed.”

Final Take: Swisher makes a good point here, and one that has ramifications for Digital Music folks. This sale is about News –specifically about Tim Armstrong’s passionate belief that news is the most powerful and most viral category to unleash AOL from the shackles of its dependency on a dwindling  homepage and dial-up audience.

While news has historically been a good driver for AOL, in the 2000′s news shared the AOL spotlight with Entertainment & Music.  After all, AOL was the digital home of Live 8,  and countless other big-budget live concerts and music offerings over the last decade. Despite its declining audience, AOL has consistently been a great resource for music marketers. Labels and managers shrewd enough to understand what kind of artists and content AOL would likely go full-bore with, have forged productive relationships with AOL. But now, with last night’s Huffington Post deal, the position Music plays in the AOL arsenal is in question.

If you’re an optimist, you can point to the successful realignment towards music news that AOL  has engineered over the last few years. AOL Music is still a property racking up over 20mm monthly uniques — mostly by treating music as celebrity news, and leaving the majority of video & audio streaming to YouTube and Vevo. The optimist says a healthy AOL is a good thing for Digital Music. The AOL Music channel is likely to leverage increased overall traffic, as well as the newfound advertising sheen brought by the Huffington deal.

If you’re a pessimist, you can point to a projection of decreased opportunities for music and the music channel at the new AOL. With the Huffington Post deal, the amount of sticky content now under the AOL umbrella has, at the least doubled. How in the world is a video premiere or listening party going to compete for the AOL homepage with name-value instant Obama analysis, or three celebrity-authored takes on the Kardishan’s latest marriage woes?

Lastly, if you simply find yourself wondering if the whole Huff Post/AOL thing is “twice as big as it needs to be”, well then you are either a technologist, or knew one who worked at Steve Case’s AOL Time Warner.

Stay tuned.

Tim Armstrong’s internal AOL memo announcing the deal.

1 comment

  1. In other words: how long before the majors realize they need to become content farms?

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