Does AOL have a MySpace problem?
You may recall that MySpace was a social-media phenomenon when Rupert Murdoch bought it back in 2005 for $580 million. It wasn’t long, though, before Facebook zoomed past it, rendering Murdoch’s new toy all but worthless. The site is now for sale. A large part of it may have been that Facebook was simply better technologically. But surely some of MySpace’s lost cachét was due to a perception among users that anything owned by Murdoch wasn’t cool anymore.
Which brings us to AOL and the Huffington Post. When AOL chief executive Tim Armstrong forked over $315 million for HuffPo, he no doubt thought he was acquiring, among other things, an army of unpaid bloggers. But not so fast.
AdBusters reports that there’s a boycott under way:
Socialite Arianna Huffington built a blog-empire on the backs of thousands of citizen journalists. She exploited our idealism and let us labor under the illusion that the Huffington Post was different, independent and leftist. Now she’s cashed in and three thousand indie bloggers find themselves working for a megacorp.
Follow it on Twitter at #huffpuff.
Two old Boston Phoenix friends have weighed in as well.
Al Giordano writes that he cross-posted 26 of his stories on HuffPo between 2007 and 2009. He stopped, he says, because he “grew uncomfortable with how that website was transparently becoming more and more sensationalist, cult-of-personality generated.” Now he’s removed his posts, replacing them with this:
(As author and sole owner of the words in this story, I did not write them for AOL, and do not wish to have any association with it imposed upon me. The original text may still be found at http://narconews.com/thefield – Al Giordano, February 7, 2011)
On Facebook, Barry Crimmins adds:
What Ariana Huffington sold for $315 mil was a lot of bloggers who work for free and all the eyeballs they attract to HuffPo. Feeling exploited? Stop working for free for HuffPo and stop providing HuffPo with the value of your visits. Believe me, there will be alternatives. True alternatives.
Dan Gillmor says that, at the very least, Huffington ought to start paying people.
It’s hard to know to what extent HuffPo’s unpaid bloggers fit into Armstrong’s plans. At the very least, though, it’s beginning to look like he did not get what he paid for. He could ask old Rupe about that.
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Don’t call me Shirley! And, really? This is just gratuitous Murdoch-bashing. (Not that there’s anything wrong with that.) I can’t recall anyone expressing this opinion – I think the reasons in the McWilliams piece were far more relevant.
At least AOL won’t suffer this problem – AOL hasn’t been cool since the early 90s.
And, what Gillmor says.
I think the better headline would be, ‘Is AOL-HuffPo Deal the AOL-Time Warner Merger Redux’?
I can easily foresee AOL’s primary revenue source– dial-up Internet access– continue to decline, while Huffington builds her content empire more and more. Finally the AOL board torpedoes Tim Armstrong, sells off the dial-up business to a land-line phone operator like Frontier Communications, and keeps AOL strictly as online content with Huffington the new CEO.
That would put AOL in the same sort of realm as Interactive Corp., and leave Armstrong in the same place as Steve Case circa 2003: on the curb, and in the annals of B-School case studies for years.
Doesn’t this suggestion of imminent disaster tilt on the premise that bloggers like Al Giordano are, well, cool?
@Mike: Cooler than Rupert Murdoch!
So thousands of bloggers donated their words to Huffington Post because they thought it was Leftist??? So basically they were just looking for a place to post liberal propaganda and push a personal agenda. It seems to me they got what they paid for…
As the wife of a former Republican congressman and a conservative talking head for years, is it any surprise she took a big pay day from the AOL buggywhip mfg. company and cashed in on the backs of liberal wannabe journalists….
It would be interesting to see the sales contract between Huffington and AOL.
They certainly bought a blog-in-a-poke.
Contract language may allow them to do something about it.I think I see a lawsuit in their futures.
Thought this was a pretty good take on the situation from a techie view:
http://www.pcworld.com/article/218956/aol_buys_huffington_post_kills_quality_content.html?tk=nl_dnx_h_crawl
Also interesting that AOL’s capitalization loss this week in share price roughly equaled the announced acquisition cost. Of course never really understood the .com metrics anyways; always flash back to a Saturday back in the heyday when Yahoo announced an acquisition of Geocities.com (which helped people create hideous free websites with animated GIFS of cats et al) and Ford bought Volvo. Yahoo paid for more for a company that gave away their product for free than Ford did for a company that churned out cars for around $30k apiece. That new math came to a halt about a year later.
Maybe if all of these bloggers didn’t voluntarily work for FREE, then they wouldn’t have this problem.
When I heard the news, breathtakingly announced on ABC and CBS radio, my first thoughts were 1) AOL? They’re still in business? and 2) For anyone even remotely Net-savvy, AOL hasn’t been relevant since at least 1997.
Congratulations to Arianna, on her “coup” and hefty payday (as if she needed the dough), but I think in time she’ll realize she’s joined forces with the internet’s ultimate lumbering dinosaur. Beneath the headline story on the HuffPost home page they have a long bar of related photos. Going forward, they might as well replace it with shots of tumbleweeds.
Donald Trump in a dress. The cartoon says it all.
@Alan: are you kidding? AOL owns a ton of individually branded and extraordinarily popular properties, including MapQuest, SitterCity, FanHouse, TMZ, Patch and others.
It’s market cap is $2.2B, and annual revenues top $1B. By comparison, for all the hullabaloo about Twitter, whom some want to value at $50B, it’s ad revenue in 2010 was $50M. That’s cheese kurds.
AOL may be “Old New Media,” but it has hundreds of millions of users, is profitable and could afford a $300M cash payout to HuffPo. What metric for relevant are you using?
@Mike: As with others in this thread and elsewhere, I was viewing AOL through the twin prisms of “cool” and “cutting edge”, which of course is highly subjective. I realize it’s a sweeping generalization, but after averaging 3-4 hours daily online since 1994 (yes, I need to get a life) I find little to no value in not only AOL, but Yahoo! and Microsoft as well (I’ve morphed into a Linux Ubuntu snob).
YMMV.
P.S. This video says it all…especially at the :50-56 sec. mark:
http://techcrunch.com/2011/02/11/funny-die-aol-huffpo-deal/
@Alan: I’ll grant you that. What we 40-year-olds need to remember is that whatever cool is, we ain’t it, and never will be again (if we ever were in the first place).
@Alan: thank you, perfect!
@DK: the concept that AOL is allowed to have hits and misses but Rupert is not speaks to whether we care more about the information or where it comes from. When a person sees the world as it ought to be rather than how it is, it must be easy to get them to work for free. “How can someone who agrees with my world view be a hypocritical phony?” Welcome to the County Fair, kid. Now let’s see what Ms. Huffington does with her new-found wealth.
Dan, I’d be curious as to your reaction to this: http://fivethirtyeight.blogs.nytimes.com/2011/02/12/the-economics-of-blogging-and-the-huffington-post/
Which seems to be a lesson in how statistics can be used for whatever you want to prove. The fact, though, that politics is now only 15% of the traffic says it all about HuffPo. Sort of like the folks that claim to read Playboy for the interviews.
@Beth: Too tedious for me to read more than the first few paragraphs. I agree that most of the bloggers don’t bring much value. My main argument is that HuffPo has lost its cool factor, and it’s going to lose not just bloggers but readers. But we’ll see.