That's an incredibly bold move and a big bet of AOL's remaining revenue streams on the future of content on the web. It's hard to imagine a better bet in that direction. Huffington has demonstrated a clear ability to win at the bulk and low-cost content game. Somewhere in the discussion, the lawsuit about the Post's founding has got to be pondered. The best place to watch discussion of this news will probably be media industry aggregator Mediagazer. Some questions I've got, below.
Is the Huffington Post a good or bad actor in regards to the future of media? Traditional media outlets have bemoaned the Huffington Post's habit of aggregating the first few paragraphs of other sites' stories, calling them traffic and revenue leaches. My experience has been just the opposite: getting picked up by the Huffington Post has lead to a huge number of readers coming to read our articles here at ReadWriteWeb.
Can the Huffington Post strategy scale all the way up to AOL size? "AOL just bought SEO," says New York tech exec Ian Schafer.
Can AOL be saved, even by HuffPo? Reports last month, based on AOL's financial reporting, concluded that despite all its various media and content efforts - 80% of AOL's revenues are still based on subscribers holding over since the dial-up days. AOL reported subscriber revenues of $244 million on 4 million customers in the 3rd quarter of last year alone. 75% are are allegedly paying for AOL service they don't need anymore because they already have broadband internet. That's not a good sign.
Can the Huffington Post strategy bring in as much or more revenue than that? While eyeballs have come online fast, ad revenues have been much slower to move. That's in large part because in the old media world, advertisers used to say "half my advertising is wasted, I just don't know which half that is." So they bought both halves. Online, that's not the case. Every click and every conversion is countable - so ad buys can be made much more rational. Thus much less media gets sponsored. It's hard to say how this is all going to play out in the long run.
AOL is making a strong move, though, in spending more than an entire financial quarter's subscription revenue on one big content shop and its leadership.