By Matthew Romano, Columnist
America Online (AOL) made a startling announcement on Monday: it will buy the Huffington Post for $315 million. The deal, gaining much attention from critics, has many saying that it's a daring bet on the future of online news.
The AOL/Huffington Post deal is by far the biggest move that AOL CEO Tim Armstrong has made in his time at AOL. Armstrong says the deal "will create a next-generation American media company with global reach that combines content, community and social experiences for consumers."
However, many critics are also praising Arianna Huffington's keen business sense, as they see this as an intelligent move on her part. The country's admired liberal voice reached milestones when the Huffington Post, a progressive online blog Huffington founded in 2005, became a profitable $30 million business within six years.
According to Business Insider, Huffington's blog helped create 200+ jobs, raise $35+ million of capital, and build a nationally recognized brand, while at the same time becoming a new kind of news medium.
With the sale of Huffington Post, Arianna now deserves to be a role model not just for entrepreneurs and media-moguls, also but for women.
Ms. Huffington put it this way: "By combining HuffPost with AOL's network of sites, thriving video initiative, local focus, and international reach, we know we'll be creating a company that can have an enormous impact, reaching a global audience on every imaginable platform."
The sale of Huffington Post proves that digital news is becoming the leader in news outlets, as well as the most profitable. The most profitable aspect of digital news is target advertising from the data of daily readership. The Huffington Post has an enormous daily readership that AOL surely took note of. AOL simply wants to attract more people to websites through online searches, and Huffington Post will provide that.
This deal, while unexpected and surprising for everyone, isn't the first time AOL took a leap of faith with a hefty price tag attached.
In 2000, AOL infamously bought Time Warner for $164 billion. The deal is often cited as one of the worst mergers in recent history, as AOL lost $99 billion in 2002—at the time, the largest loss ever made by a company.
But many are sensing that this merge will end more happily. CNET put it simply: "AOL seems intent on convincing the world that it is deadly serious about reclaiming its place among the leaders of the digital media world." There is no better way to do so than by purchasing the Huffington Post.