Huffington Post/AOL: It's AOL/Time Warner all over again

Two troubled companies make a risky deal hoping it'll solve all their problems. Sound familiar?


Scott Rosenberg
February 8, 2011 12:01AM (UTC)

A late Sunday night in winter and the surprise announcement of a big merger, with Kara Swisher one of the key people breaking the news: No wonder the Huffington Post/AOL announcement last night gave veteran tech and media-biz reporters a flashback to 2000 and the colossally ill-fated AOL/Time-Warner deal.

The events are similar in another way: Despite all the CEO happy-talk about synergy, we are once again watching two companies in trouble taking a big gamble that the other will solve its problems.

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People think of Huffington Post as the leading popular liberal-Democratic news site. Huffington is now at least suggesting that the progressive point of view isn't a part of what she'll be pursuing at AOL. "Ms. Huffington said her politics would have no bearing on how she ran the new business," says the New York Times story. Really? This strikes me as strange, disingenuous, and about as credible as Roger Ailes claiming that Fox is not a partisan-driven institution.

One possibility is, Huffington is just saying what the corporate script requires and actually the plan is to position AOL as a sort of Democratic alternative to Fox News/Drudge -- which I think would be a really interesting move. I have to assume Arianna has big TV ambitions; I have yet to meet a new-media empire builder who didn't secretly yearn to do an Ailes (or an Oprah).

The other, more likely possibility is that this whole thing is about the money, the investors needed to cash out, HuffPo's numbers weren't looking good enough for an IPO, and Huffington is basically improvising. She'll spend a couple years at AOL and then move on. This means that, in 2011, Huffington Post will be playing the same role in relation to AOL that AOL played in relation to Time Warner back in 2000: selling itself at the top of a market bubble, pocketing the profit from a sale that couldn't be earned from customers, and leaving a bigger, older company with all the headaches.

I was one of the few outspoken skeptics of Time Warner/AOL back in 2000. This time around there are more -- see Om Malik, who looks at some numbers; Dan Lyons, who's funny; and Ken Auletta, who views the deal as AOL CEO Tim Armstrong's "hail Mary pass."

Having all this company in doubt gives me a little pause. Maybe Huffington and Armstrong will prove a great team: The queen of low-cost SEO-driven content paired with the guy who built the Google ad machine that made SEO-driven content pay. But I still think this union is unlikely to end well. AOL remains a generic blandness factory when it comes to journalism. Huffington's brand could change that; far more likely, it will just dissolve into the corporate miasma. 


Scott Rosenberg

Salon co-founder Scott Rosenberg is director of MediaBugs.org. He is the author of "Say Everything" and Dreaming in Code and blogs at Wordyard.com.

MORE FROM Scott Rosenberg

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