Newsreal: The Banana Peel Syndrome

The critic who exposed America Online's ill-fated telemarketing scheme explores why the nation's biggest online service keeps making such PR gaffes.

By David Cassel

Topics:AOL

on July 1, America Online quietly rewrote its Terms of Services, giving subscribers 30 days notice of certain changes, along with a warning that continued use of AOL “constitutes acceptance of all such changes.” Buried among the changes were plans to “make available” the phone numbers of their 8 million subscribers to telemarketers.

I stumbled across it by accident July 16, and mentioned it in an AOL newsletter I send out to more than 12,000 e-mail subscribers. Last Tuesday — nine days before the changes were to go into effect — Bloomberg picked up the story, followed by CNET, the Wall Street Journal and CNN. Two days later, according to the Wall Street Journal, New York Attorney General Dennis Vacco, who has been something of a thorn in AOL’s side, contacted the Virginia-based company. Thursday afternoon, reportedly minutes before Vacco took to the airwaves on CNBC, and with a firestorm of criticism raging, AOL withdrew the telemarketing scheme and has since spent considerable time attending to damage control.

This is hardly the first time. A journalist friend kidded that AOL doesn’t just shoot itself in the foot — it blasts away at every toe. Last November, AOL thought $20 a month for unlimited access for all its members was irresistible, but Vacco, who heads the consumer protection committee for the National Association of Attorneys General, thought it should still be the customers who decide. In January, he also pointed out that many AOL members “are getting no access whatsoever.” One day before Vacco was to file a lawsuit on the matter, and with bad publicity rising, AOL “heard the footsteps” and amended the plan.

AOL members have suffered through numerous infuriating service problems. Many subscribers still remember the 10 days in December when AOL blocked any Web page from its browser that was using Apache’s Web server. E-mail brownouts are a recurring event. Last August, just days after an AOL executive assured reporters that it was immune to nationwide outages, AOL made headlines when the entire service went down for 19 hours. Last month, after major delivery problems were noted, we were told that AOL’s e-mail system was “more reliable than ever.” Test messages I sent five days later still took 12 hours to arrive — on four consecutive days. In tests I conducted up to July 17, the mail rarely arrived in less than eight hours. Mailing list subscribers reported delays of several days. The service is also plagued by unreported mini-outages affecting subsets of subscribers or parts of the service.

Yet, as AOL’s latest marketing campaign insists, “We’re ready for you,” and to prove it, consumers are being barraged with a new avalanche of television ads and software CD-Rom and floppy disk mailings. Life goes on and everything’s fine.

But is it? AOL may be a masterpiece of marketing, but after nearly a decade of deficit-financed growth, it needs to morph into profitability, and soon. Last September it abandoned its dubious accounting practice that had marketing and promotion expenses treated as assets. And those expenses are huge. Burying the nation in floppy disks — 3.5 AOL disks for every U.S. household, according to one estimate, — has cost AOL over $500 million dollars, or $200 per subscriber in one quarter’s tally. Writing off $385 million of accumulated expenses, AOL gambled on getting subscriber and revenue growth by matching the Internet’s standard all-you-can-eat pricing. Besides leaving them strapped for capacity, it has left them even further strapped for cash.

To compensate, AOL is now looking to cultivate “alternate revenue streams,” like selling subscriber lists to telemarketers. At least one recent advertising deal on AOL, with Tel-Save, included provisions for a cash advance. AOL users now find their mailboxes and chat rooms include mini-billboards. Signing onto the service triggers pop-up ads, which are on by default. (At the little-publicized “Marketing Preferences” keyword, deactivating them is choice No. 15 — below “If you own a CD-ROM drive, enter ‘X’ here.” Last week it was so clogged with users trying to opt-out of the telemarketing phone calls, the Washington Post reported some subscribers couldn’t even access it.)

CEO Steve Case has said all along that his plan was for AOL to corner a significant chunk of the online world’s users, even if it involved some loss-leader economics, and then use them as leverage for money-making schemes. So, subscribers should expect more unwelcome surprises as AOL seeks to reward its investors’ patience. AOL should also know, if it doesn’t already, that it is being carefully watched. Earlier this month, Vacco raised concerns about how AOL’s all-you-can-eat pricing gels with last week’s new $2-an-hour rates for AOL’s game areas.

: David Cassel is an Oakland, Calif.-based freelance writer covering the Internet and popular culture. More David Cassel

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The stupid saga of Andrew Breitbart and the Huffington Post

The "liberal" news site promotes a notorious right-wing propagandist -- until he insults one of Arianna's friends

By Alex Pareene

Arianna Huffington and Andrew Breitbart

Topics:Huffington Post, Andrew Breitbart, AOL, Media Criticism, War Room

So! Arianna Huffington — recently put in charge of all the “content” at AOL following the dial-up ISP’s acquisition of her former “liberal Drudge” Internet newspaper — gave a blog to her old friend Andrew Breitbart. Breitbart helped build the HuffPo, back when he was just another loudmouth Hollywood conservative and not the even louder-mouthed full-tilt culture warrior he is today (thanks in part to training at places like the Claremont Institute). Hundreds of people — many of them idiots, frauds, and liars — have blogs at the HuffPo. But the HuffPo actually promoted Breitbart’s writing on the front page of the site.

Now, Mr. Breitbart is not just a conservative pundit. He is a crusading propagandist who publishes a wide variety of untruths and smears across his “Big” websites. He is not guilty of having the wrong opinions, he is guilty of being a shameless, race-baiting bully.

So various whiny liberals complained, like always, and the Huffington Post bravely promised to continue promoting the stupid nonsense from Arianna’s old friend, in the name of democracy and the free exchange of ideas. (“Ideas” like “NPR and the White House are collaborating to spread the false idea that the Tea Parties are racist” and “the White House is lying about its visitor logs and specifically including the names of famous people in order to embarrass Andrew Breitbart.”) ColorOfChange.org organized a petition, the HuffPo dismissed its complaints.

Complaining about the Huffington Post publishing awful, offensive garbage seldom works, because some of that garbage is profitable and some of it is just stuff that Arianna herself seems to like. And Huffington herself is too busy spending big bucks bringing big names to AOL/HuffPo while shuttering dozens of existing titles and letting various less impressive content-providers go to care if a bunch of liberals are mad at her site.

But! Breitbart then apparently went too far when he said a bunch of stupid and offensive things about Van Jones in an interview with the Daily Caller. And Arianna is actually quite close to the former White House “green jobs czar.”

So: That got Breitbart kicked off the front page, finally.

Andrew Breitbart’s ad hominem attack on Van Jones in The Daily Caller — right down to calling him a “commie punk” and “a cop killer-supporting, racist, demagogic freak” — violates the tenets of debate and civil discourse we have strived for since the day we launched. As a result, we will no longer feature his posts on the front page.

He is welcome to continue publishing his work on HuffPost provided it adheres to our editorial guidelines, as the two posts he published on HuffPost did — guidelines that include a strict prohibition on ad hominem attacks. Our decision today recognizes that placing posts on the front page is an editorial call that elevates some posts over others, and is an indication of how seriously we take these judgment calls.

A strict prohibition on ad hominem attacks! (“Against Arianna’s friends,” is the bit of that sentence that spokesman Marco Ruiz left out.) (Also there is apparently no prohibition on constant, practically obsessive race-baiting, but whatever.) (And obviously there is no prohibition whatsoever on spreading toxic bullshit about autism and other assorted crimes against science.)

Andrew has now gotten exactly what he wanted. He doesn’t need to publish his idiocies at the Huffington Post. But getting banned from the Huffington Post proves his thesis about the repressive, anti-free speech liberal media. And he’ll never shut up about it.

: Alex Pareene writes about politics for Salon. Email him at apareene@salon.com and follow him on Twitter @pareene More Alex Pareene

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TechCrunch’s Alexia Tsotsis stands up for snark

More troubles at AOL, and why you should never tell a blogger to "tone it down"

By Drew Grant

Alexia Tsotsis, blogger, will not tone it down

Topics:AOL

Bloggers are journalists in the traditional sense of the word. They rarely get paid as much, often don’t get benefits, and considering the high turnover rate at most online publications, don’t ever have to worry about figuring out what a 401k is. But profession aside, bloggers also differ from journalists in that they aren’t as beholden to the publication they work for, and since they have less to lose than a guy working at the Wall Street Journal for 20 years, don’t feel the need to kowtow to every order that comes from up high.

Case in point: Alexia Tsotsis, a writer for TechCrunch, recently wrote a story about how the film “The Source Code” was trying to market itself to techie types at SXSW, despite having little to do with anything technology-related. (This was her angle after interviewing two of the film’s stars and seeing the film as a guest of Summit Entertainment.) Apparently Summit didn’t like her takeaway of the film, and passed along a message to Moviefone (which, along with TechCrunch, is owned by AOL) that Alexia needed to “tone down” her attitude. Instead of defending a journalist’s right to a negative review (because remember, bloggers are P.R. copy-spitting machines, not real journos), the reps for the sister site passed along the message, telling Alexia to change her piece so it was less “snarky.”

Snarky, by the way, is just the catchall term for how bloggers write, and has become something of an empty phrase fitting under the umbrella of any sort of criticism of a subject. Here was the letter Alexia received from an AOL TV/Moviefone representative :

Hope you’re having a good time at SxSW and that it’s not been too crazy busy for you!

First wanted to thank you for covering Source Code/attending the party, etc. But also wanted to raise a concern that Summit had about the piece that ran. They felt it was a little snarky and wondered if any of the snark can be toned down? I wasn’t able to view the video interviews but I think their issue is just with some of the text. Let me know if you’re able to take another look at it and make any edits. I know of course that TechCrunch has its own voice and editorial standards, so if you have good reasons not to change anything that’s fine, I just need to get back to Summit with some sort of information. Let me know.

Thanks!

How did we get the letter? Easy: Alexia posted it, along with her rebuttal as to why it was unethical for her to change her opinion of a film just because she saw it with a press pass. After taking a swipe at Summit’s marketing strategy (“Summit thought that by inviting me to their party they were basically buying a puff piece,” ) she homed in on her real target: AOL.

The issue is simply that Summit thinks it can pressure us, through an AOL sister site, into making a balanced report more glowing. And while it’s inappropriate, it’s not surprising. What is surprising, and sad, is that Moviefone/AOL actually tried to comply with their request and asked us to change our post. It’s not just sad, it’s wrong.

So no AOL, and Moviefone, and Summit, I will absolutely not tone down my snark. This is Silicon Valley, not Hollywood.

With all the scrutiny AOL is under right now, having one of its own bloggers give such a withering commentary on company policy cannot have made those in charge very happy. And in AOL’s defense, this seems like it was an issue between two sites inside the company (Moviefone and TechCrunch) and not a demand from corporate. Still, it’s a ballsy move on Alexia’s part to call out her employer.

: Drew Grant is a staff writer for Salon. Follow her on Twitter at @videodrew. More Drew Grant

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I’m an AOL chatroom junkie

It's been 10 years, and I'm more addicted to my online community of politicos than ever

By Gael McCarte

Topics:Internet Culture, AOL, Life stories

My name is Gael McCarte, and I am an AOL political chat room junkie. It started gradually. One chat at a time. That was 10 years ago.

At first I had it under control. Then slowly, it took over my life. Whenever I heard something on the news, I’d need to discuss it with others who cared as much as I did.

And now when I talk about Blue, and Cloud, and Muf, and Cheezie, and BBD and Just, my family understands. They’ve had to adapt.

On nights when sleep eludes me, I pillow prop in bed and chat through clicking keys with other insomniacs. I’m not interested in supporting opinions. I seek out those who don’t share my political point of view but who can discuss their own intelligently.

One of my favorite chatters says he is 80. He is crusty, and his political views are diametrically opposed to mine. I look forward to hearing his take on an event or policy. He’s a wordsmith. I find his “from a bygone era English teacher” grammatical style enchanting.

Of course there are also the bad days. The days the “trolls” invade. These are the chatters who can only express their divergent views in expletives and insults.

Then there are the “parkers” who come into the room but say nothing. By parking they prevent other chatters from entering. Some of these computer-savvy users have multiple screen names, so they can park on more than one of the “chairs.”

One particularly savvy visitor who claimed he once worked for AOL had as many as 21 aliases. After parking for months on end, he virtually destroyed the room. Many regular chatters stopped visiting. The invader often occupied one of his screen names and would abuse and attack longtime visitors who managed to get into the chat. AOL was advised repeatedly, and finally he was expelled from the room. But some of our number still have not returned.

And of course there’s tiresome infighting. The rumors, the gossip, the alleged affairs; the chatters who instant message or e-mail while in the room, creating side chats and cross conversations; the misidentifying of fellow chatters, assuming one is actually someone else and accusing them of doing or saying something another chatter did. Three users have been dubbed the “mean old ladies.” I don’t know if they’re ladies or old, but they’re certainly mean. After one verbally attacks a chatter outside of the vitriolic trio, the other two come in for the kill. Like bullies everywhere, they tend to prey on the more vulnerable chatters.

Abbreviations and code words are used to confuse those outside the inner circle. One chatter I will call Muffin, Muf for short, says she lives in a trailer somewhere in the South. She tells us when the trailer pipes freeze, when the owner raises the rent, when she is ill, when her husband gets drunk, when her children or grandchildren run into trouble. The gossip of the group is that Muf is on welfare of some kind. She greets everyone warmly, and is often attacked by those who seek out the vulnerable.

Once, she and Mr. Muf went someplace special. She wore a blue velvet pantsuit she bought in the ’70s. She said she scrubbed up and that she must have looked OK because Mr. Muf was not ashamed to be seen with her. For some reason that made me cry. For all I know “she” is a 50-year-old man scratching his belly in Arizona, but the life story she tells is poignant.

Most of us rejoiced when Blue gave up smoking. Most of us recoiled when antiwar Cloud said unrepeatable things about the military officer son of another chatter. The soldier died in battle in Afghanistan. Most put Cloud on “ignore” the moment he ventures into the room. And so the room expresses disapproval and disciplines those who venture in and misstep.

Newcomers are treated with caution until a regular vouches for them. Or until they prove themselves. Jokes and different chats occur, there is the “gun chat,” the “menopause chat” the “we are the girls chat,” the “we are the boys chat,” the “sex chat,” the “recipe chat” and so on. At times different groupings will try to meet in person, with varying degrees of success.

From cities and rural areas, from trailers and homes, from different corners of this country and even around the world, abled and disabled, employed and unemployed, Republican, Libertarian and Democrat, graduate degreed and high school escapee we join on our computer screens and chat. Understanding that everyone in the room is only who they say they are, that the many AOL users are millionaires only in their imaginations, our group is coherent, cohesive and, well, just plain fun.

There is no one I’d rather spend a State of the Union address or an inauguration with than this diverse group. I won’t be giving it up any time soon. As for my family? They’ve adjusted.

: More Gael McCarte

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Can Huffington transform AOL like she has herself?

The media world is abuzz with speculation about the AOL/HuffPost merger. Can Arianna bring home the bacon?

By Michael Liedtke, Associated Press

FILE - In this Sept. 23, 2010 file photo, Arianna Huffington speaks at the Clinton Global Initiative in New York. It was announced Monday Feb. 7, 2011 that AOL Inc. is buying online news hub Huffington Post and that Huffington will be put in charge of AOL's growing array of content. (AP Photo/Mark Lennihan, file) (Credit: AP)

Topics:Huffington Post, AOL

AOL can only hope that longtime political gadfly and budding media baroness Arianna Huffington proves to be as adept at engineering corporate transformations as she has been at personal ones.

Since she became a prominent public figure as the wife of a multimillionaire running for the U.S. Senate in 1994, Huffington has been a darling of Bill Clinton-bashing conservatives and a heroine for liberals railing against President George W. Bush and the Iraq war.

She disavowed have any interest in becoming a political candidate herself during her husband’s unsuccessful campaign only to make an aborted run for California governor in 2003. She has been criticized for falling under the influence of self-help gurus and hailed for having the courage to pursue her own convictions.

Along the way, she has been proven she can be both charming and antagonizing — sometimes all within a few minutes of conversation punctuated in her distinctive Greek accent.

“She is a force of nature. It can really be something to watch her in action,” said Jeff Jarvis, a City University of New York journalism professor who has gotten to know Huffington while writing a blog about online media. “She is one of those people who will tell you, ‘We simply must do this’ and will persuade you to do it. She believes she can change the world.”

Huffington, 60, could have her biggest pulpit yet at AOL Inc. It’s paying $315 million to buy her news and opinion site, the Huffington Post, and anointing her as its next best hope to orchestrate a long-awaited turnaround at an Internet company that lost its way a decade ago.

After the deal closes this spring, Huffington will oversee most of AOL’s content as the company tries to attract more people and sell more ads. The inventory includes technology sites Endgadget and TechCrunch, Patch.com’s network of suburban news sites and online mapping service Mapquest. Combined with the Huffington Post, the sites will have a total audience approaching 300 million people worldwide.

“I think that we have an incredible opportunity to tell the stories of our times, at the national level, at the local level and increasingly at the international level,” Huffington told The Associated Press during a Monday interview.

Huffington’s charisma and the high hopes riding on her were on display when she swung by AOL’s New York offices Monday to introduce herself to about 300 employees. They greeted her with a standing ovation, according to Howard Fineman, a Huffington Post employee who accompanied his boss.

“She’s the one who had them in the palm of her hand, explaining the mission and telling jokes,” said Fineman, who first met Huffington in 1994 while he was at Newsweek magazine writing a story about her. “She’s a star.”

Although she was already well-known as author and commentator with frequent appearances on TV and radio, Huffington didn’t become a really hot commodity until she started the Huffington Post in 2005 with former AOL executive Kenneth Lerer. Backed by just $1 million from her initial investors, Huffington thought there was a place for a site featuring the opinions of her celebrity pals, who would write for free.

The concept was initially ridiculed, but it struck a chord and became more popular as it started to repackage and comment on the top stories from other sites.

By the time AOL came courting, Huffington Post had more than 6,000 unpaid bloggers and a payroll of 210 people who occasionally score their own scoops. It ranks among the Internet’s top 10 destinations for cultural and global news with an average of 25 million visitors per month.

The site’s success stamped Huffington as the 28th most powerful woman in the world in an October 2010 list compiled by Forbes magazine. She ranked right behind Microsoft Corp. co-founder Bill Gates’ wife, Melinda, who just contributed a piece about vaccines to Huffington Post last month. (First Lady Michelle Obama topped that Forbes list).

Long before she became a mover and shaker in her own right, Huffington had developed a knack for finding her way into influential circles. When she married Texas oil scion Michael Huffington in 1987, philanthropist Ann Getty footed the bill, television news personality Barbara Walters was a bridesmaid and the guest list included former U.S. Secretary of State Henry Kissinger. When her 2006 book “On Becoming Fearless” came out in 2006, Silicon Valley billionaire Larry Ellison hosted a reception in his San Francisco home overlooking the Golden Gate Bridge.

“The Internet was invented for Arianna Huffington,” Fineman said. “Finally a medium was created for her and allows her to fully be what she was destined to be, which is a global networker.”

Most of Huffington’s 13 books are about political and social topics. One exception was a biography about Pablo Picasso that stands as testament to her love of art. When she invited a few reporters to join her for a dinner party with music and movie executive David Geffen at her Los Angeles-area home a few years ago, Huffington proudly pointed out a painting the she said was done by Picasso’s mistress.

Huffington was born in Athens in 1950 as Arianna Stassinopoulos. After her parents broke up while she was a teenager, she moved to England. She eventually enrolled at Cambridge University, where she would hone her verbal sparring skills as president of the Cambridge Union Society, a debating club dating back to 1815. She would also get a master’s degree in economics.

After college, she developed a fascination with self-help philosophies that are said to still influence her today. She once was friendly with Werner Erhard, the founder of the self-help program “est,” in the 1970s and later became a minister of in the Movement for Spiritual Inner Awareness founded by a man who would become known as “John-Roger.” That connection came back to haunt her after published stories aired allegations of sexual and financial abuse against John-Roger.

Huffington embraced the conservative views of her husband, Michael, who was elected as a California congressman representing the Santa Barbara area in 1992. He then mounted a 1994 bid for a Senate seat against Dianne Feinstein. Arianna campaigned hard for her husband, but Michael Huffington lost, even after spending $28 million of his own fortune.

After that setback, Arianna Huffington remained a staunch Republican who backed then-Speaker of the House Newt Gingrich.

Her politics began to lean to the left following her 1997 divorce from Michael Huffington, who later made even more news by revealing he was bisexual. The Huffingtons have two daughters, Christina, now 21, and Isabella, 19. They both attend Yale University.

Tony Blankley, Gringrich’s former press secretary, has had an up-close view of Arianna Huffington’s political evolution as the co-host of a National Public Radio Show called “Left, Right & Center,” He now fills the conservative role that Arianna once played on the weekly program. The two remain good friends, largely because Blankley can’t resist Arianna’s flair.

“When you start looking for someone who’s got her set of mind and personality, it’s just real hard to find, left, right or center,” Blankley says.

——

AP Technology Writer Jessica Mintz in Seattle, AP Technology Writer Rachel Metz in San Francisco and AP Business Writer Ryan Nakashima contributed to this report.

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AOL HuffPo buy signals news, ads push

AOL's shift equals a new direction

By AP/Salon

A small AOL placard is displayed on their offices in New York, Monday, Feb. 7, 2011. Internet company AOL Inc. is buying news hub Huffington Post in a $315 million deal that represents a bold bet on the future of online news. (AP Photo/Seth Wenig) (Credit: AP)

Topics:Huffington Post, AOL

AOL Inc.’s $315 million deal to buy news hub Huffington Post signals that it is serious about building its profile as a media company as its legacy dial-up Internet business dies away.

The acquisition announced Monday is AOL CEO Tim Armstrong’s most aggressive play so far as he tries to reshape a fallen Internet icon and boost efforts in news and online advertising. It is the largest purchase the company has made under Armstrong, a former Google advertising executive hired by AOL to engineer a turnaround.

The Huffington Post ranks as one of the top 10 current events and global news sites and draws 25 million U.S. visitors each month. It has built its popularity by compiling news from a wide selection of other media outlets, with links to articles and video on everything from politics to style to food. The site combines that type of aggregation with original work by its own small staff and blog posts from celebrity contributors who work for free in return for a platform to express their opinions. Bill Gates has written for Huffington Post, along with President Barack Obama, Robert Redford and several university presidents.

But just as important as gaining the site itself, the deal adds Huffington Post co-founder and media star Arianna Huffington to AOL’s management team. Once the deal closes later this year, Huffington will run AOL’s growing array of content, which includes popular technology sites Engadget and TechCrunch, local news site Patch.com and online mapping service MapQuest.

Although some analysts say that AOL is paying a lot for the Huffington Post brand, Benchmark Co. analyst Clayton Moran believes the price isn’t a huge hit for the company in the short term, especially since it helps put to rest any question that AOL is now an online media company. Bringing Huffington Post to AOL gives it access to quality content and will drive new users to its site, replacing those the company has lost over time, he said. And the price is essentially “the hiring fee to get Arianna,” technology analyst Rob Enderle says. Although he described the purchase as an “out-of-left-field” decision, he thinks the move “could put AOL back on the map.”

Huffington Post grew quickly from startup to online colossus. Over time, it launched city-specific pages and developed a roster of sections such as food and books. The work of its 70-person paid staff is augmented by content from news outlets and 6,000 bloggers who write for free. Outsell Inc. analyst Ned May said the Huffington Post “has done a fantastic job of building content creation. And AOL can monetize it.”

AOL sorely needs to. The company rose to fame in the ’90s with its dial-up Internet service, managing to buy media company Time Warner Inc. in 2001 at the height of the dot-com boom. The corporate marriage never really worked, though, and AOL’s main source of revenue began drying up as consumers flocked to speedier broadband Internet connections. After nearly a decade of attempts at integrating the two, Armstrong was brought in to prepare AOL to separate from Time Warner, and the companies split in Dec. 2009.

Although analysts say AOL’s decision to buy Huffington Post is sound, Enderle warned that putting Arianna Huffington into a position of power could eventually threaten Armstrong’s job security if AOL still struggles.

Gartner analyst Andrew Frank added that the deal is risky in the sense that media acquisitions are inherently risky these days.

“There is a lot of effort ahead for online media to recapture the glory days when media was booming business,” he said. “Deals like this offer hope. On the other hand you can’t really dismiss the somewhat uneven record AOL has had with acquisitions.”

Beyond Time Warner, another of AOL’s well-known failed acquisitions was social network Bebo, which AOL bought in 2008 for $850 million and then unloaded two years later to Criterion Capital Partners for an undisclosed amount thought to be a fraction of what it paid.

Regardless, both parties clearly feel optimistic about this deal. In a blog post, Arianna Huffington praised Armstrong’s vision for AOL and said they were on the same page as they discussed their ambitions for online news. “We were practically finishing each other’s sentences,” Huffington wrote. She said the deal was signed at the Super Bowl in Dallas, which she and Armstrong attended.

In an interview Monday, Armstrong said the deal is a “tremendous opportunity” for AOL that brings an influential audience that is attractive to advertisers. The site’s visitors and many of its contributors include business leaders, doctors and university presidents, he said.

“Last year was about the turnaround; this year is about the comeback,” he said.

Armstrong has been trying to turn AOL into a go-to place for a wide variety of news since he was hired to revamp the company in April 2009 while it was still a part of Time Warner. The makeover is designed to give people a reason to visit AOL’s websites more frequently to help boost ad sales. AOL had just a 5.3 percent share of the U.S. display advertising revenue in 2010, down from 6.8 percent in 2009, according to eMarketer. Facebook, meanwhile, accounted for 13.6 percent of display revenue last year, up from 7.3 percent in 2009.

Armstrong also has reduced payroll by thousands of employees through layoffs and buyouts to try to boost AOL’s financial performance and stock price. It has been a slog so far. AOL lost more than $780 million last year, largely because of accounting charges, and the company’s stock is now worth slightly less than after it was spun off from Time Warner Inc. 14 months ago.

Founded in 2005, Huffington Post is owned by Huffington, Kenneth Lerer and other investors. They will get $300 million of the purchase price in cash. The remaining $15 million will be paid in AOL stock.

On a conference call with analysts, AOL Chief Financial Officer Arthur Minson said the company expects Huffington Post will generate $50 million in revenue this year, with a profit margin of 30 percent. By comparison, AOL drew $2.42 billion in revenue last year. About 53 percent came from ads, and most of the rest from its dwindling base of dial-up Internet subscribers. Minson said the deal will save AOL $20 million a year by allowing it to eliminate operations that overlap with Huffington Post.

If it wins regulatory approval as expected, the transaction would likely close in late March or early April.

Shares of AOL, which is based in New York, fell 75 cents, or 3.4 percent, to close Monday at $21.19.

—-

AP Business Writer Andrew Vanacore in New York and Technology Writers Michael Liedtke in San Francisco and Barbara Ortutay in New York contributed to this report.