AOL Buys The Huffington Post to Become Huffington Post Media Group

What do you call it when a struggling company buys a successful, popular entity? A golden combination for that struggling company. AOL which been declined in the past few years, has acquired the Huffington Post, resulting in a combination of the companies named Huffington Post Media Group. According to “Betting on News, AOL is Buying The Huffington Post” by Jeremy W. Peters and Verne G. Kopytoff, AOL is paying $315 million for the acquisition. A great price considering The Huffington Post started with $1 million.

For The Huffington Post, they are receiving capital to help them grow bigger and faster. They will also have the ability to pay investors in the company considering the company hasn’t shown interest in an IPO. Arianna Huffington, co-founder and Editor-in-Chief will gain more titles, becoming president and editor-in-chief of Huffington Post Media Group. According to the article, “the arrangement will give her oversight not only of AOL’s national, local and financial news operations, but also the company’s other media enterprises like MapQuest and Moviefone.” She states on her post on The Huffington Post her resolution for the site was to go global and offer better video content. She sees this “merger” as Huffington Post’s ability to achieve those resolutions.

For AOL, the acquisition will hopefully bring AOL back. The article reports AOL has reported a 26% drop in revenue in the last quarter and ad revenue has dropped 29% in the last year. AOL has “eliminated close to 2,500 positions, roughly a third of its staff” and is recovering from a bad merger with Time Warner. AOL is still bigger than the Huffington Post and the merger should stop the company from falling down its struggling path.

As both companies will merge, the vision is both can give and take from each other. AOL will see itself becoming better as part of a new entity, which is expected to be successful. The Huffington Post will expand faster. Both will benefit from combining their volume of visits and attracting new readers. According to Arianna Huffington, the merger is a mutually understood perspective between her and AOL’s CEO Tim Armstrong; both have similar goals for their companies and believe the merger will help achieve those goals.