Since early days of the internet one of the most often used terms is – Content Is King. Good content will always have value or rather it will finally get its value. The Huffington Post acquisition by AOL showed good content has value.
Few notable points,
- HuffingtonPost.com launched on May 9, 2005. Started operations with seed money of $2 million.
- Acquired by AOL for $315 million: $300 million cash, $15 million in stocks (low risk for Arianna Huffington, high for AOL). Acquisition was completed in less than 2 weeks.
- Multiples: Translates to 5-6 times 2011 revenues, 10 times 2010 revenues.
- Yahoo too tried to acquire HuffingtonPost in 2010.
- As of Dec 2010, the company had raised $35 million and most of the $25 million that was raised in the last round is in the bank.
- Investors: angel investors such as Lerer–the largest individual shareholder, followed closely by co-founder & CEO Arianna Huffington–and venture firms such as Greycroft Partners, Softbank Capital and Oak Investment Partners.
- Arianna Huffington makes a profit of $100m.
- Size of Internet advertising in 2011 in US: $28.5 billion, ad dollars are shifting to the web, hence these deals are not getting to be just mandatory but important.
- Two big content acquisitions by AOL CEO Tim Armstrong: TechCrunch [$25m], HuffingtonPost
- Sales: $30 million (2010), $50 million (2011), $100 million (2012)
- Posted first year of profit in 2010
- Jan-Dec 2011 projections: Sales $50 million, profit $10 million
- 25 million uniques (comscore Dec 2010), page views approx 500 million a month.
- Unique user competition (comscore): New York Times (35 million), Daily Beast (3.7 million), Drudge Report (1.7 million)
- The New Combined Media Group Will Reach 117 Million Americans and 270 Million Globally
- At 500 million pageviews a month, the company is bringing in a little more than a $1 per user per year (deal size: $315 m, using Dec 2010 as base: 300 million unique users per year)
Content on Huffington Post
- Content type on the site: left-leaning political site, investigative journalism
- Each day, the Huffington Post aggregates about 300 stories from other publications, publishes a similar number of original stories and about the same number of original blog posts.
- It has 97 full-time editorial staffers and 203 employees in total (Dec 2010)
- A good article in Dec 2010 got 710,000 page views, shared by 25,000 and a whopping 7100 comments
- Arianna Huffington will be in charge of all AOL content and other properties, including well-known names such as Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and more.
How does this effect in India?
We will hear about content portals getting a little more attention from VCs in India but one needs to see how many will actually get funding.
For me, this only raises the bar, we content portals in India have to achieve a lot more. This deal shows good content, bold content, investigative content will work.
Co-founder Ariana Huffington was 60 years old at the time of acquisition, clearly age is no bar in internet entrepreneurship.
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