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February 06, 2011

AOL buys Huffington post for $315 million

AOL has bought the Huffington Post for $315 million.

In Dec, 2010, 24-7 Wall Street valued the Huffington Post at $150 million and as the second most valuable blog after Gawker.

This is not an impact on the future, but is a minor data point that seems to confirm the relative accuracy of the valuation estimates made by 24-7 Wall Street on private blogs. The difference between the AOL purchase price and the valuation estimate is the buyout premium.



Information about Huffington Post growth and synergies with AOL

* HuffPo turned its first profit in 2010 on $30 million in revenue. HuffPo expects to triple revenue by 2012.

* AOL is projecting a 30 percent profit margin for the site this year and expects to wring $20 million of cost savings by combining HuffPo with its own news sites. The combination will reach about 117 million unique visitors a month in the U.S

* Huffington's site now gets 25 million unique visitors a month, rivaling The New York Times' 32 million. The Huffington Post is the classic case of what Harvard Business School professor Clayton Christensen calls the "innovator's dilemma." HuffPo was the side-show innovator that mainstream media executives didn't see coming. While they wrung their hands over whether to charge for online content, Arianna Huffington upended their business models.

* It's been a fast-growing startup. Now it can be a fast-growing, major digital media company

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