A news announcement at midnight on Super Bowl Sunday had better be something big if it expects to attract any kind of attention, and in the media world, this one was huge (and shocking): Aol announced that it will acquire The Huffington Post, and that HuffPost co-founder and editor-in-chief Arianna Huffington will assume the post of president and editor-in-chief of The Huffington Post Media Group, encompassing all HuffPost and Aol content including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, and StyleList.
The transaction is valued at $315 million, with approximately $300 million to be paid in cash funded from cash on hand, and it is expected to close in the late first quarter or early second quarter of this year.
Aol chairman and CEO Tim Armstrong said in a release:
The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers. Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers.
Arianna is a singularly passionate and dedicated champion of innovative journalistic engagement and a master of the art of using new media to illuminate, entertain, and enhance the national conversation. Arianna is a remarkable person, and she will continue to create remarkable outcomes for the combined company.
This is truly a merger of visions and a perfect fit for us. The Huffington Post will continue on the same path we have been on for the past six years — although now at light speed — by combining with Aol. Our readers will still be able to come to The Huffington Post at the same URL and find all of the same content they’ve grown to love, plus a lot more — more local, more tech, more entertainment, more finance, and lots more video. We are fusing a legendary and powerful new media brand with a vibrant, innovative news organization, known for its distinctive voice, a highly engaged audience, an expertise in community-building, and a track record for demystifying the news and putting flesh and blood on the data while drawing our audience into the conversation.
By uniting Aol and The Huffington Post, we are creating one of the largest destinations for smart content and community on the Internet. And we intend to keep making it better and better.
And HuffPost co-founder and chairman Kenneth Lerer said:
The Huffington Post team has created a potent brand with the proven track record of knowing how to grow traffic, inform, and entertain its readers and build a one-of-a-kind online community. Add that to the powerful scale and resources of Aol, and you have the perfect combination for today and the future. Together, these two companies will be a premier online content provider. From local citizen reporting through Aol’s Patch, to The Huffington Post’s national reporting on politics, business, and culture, consumers will have access to everything they want whenever they want it.
From Armstrong’s internal email to Aol staff:
We are taking another major step in the comeback of Aol. Today, we are announcing that we have agreed to acquire The Huffington Post, one of the most exciting, influential, and fastest growing properties on the Internet. We believe in brands, quality journalism, and the positive role of communities in the world. The Huffington Post shares our values, and the combination of the two companies will create the premier global and local media company on the Internet.
The Huffington Post is core to our strategy and our 80:80:80 focus — 80 percent of domestic spending is done by women, 80 percent of commerce happens locally, and 80 percent of considered purchases are driven by influencers. The influencer part of the strategy is important and will be potent.
The Huffington Post is a strong influencer brand and it attracts a valuable audience, including a great focus on women’s content. In addition, Arianna Huffington is a world-renowned expert on women’s topics and issues, and she has enabled The Huffington Post to grow rapidly by continually developing new audiences.
In the local area, the combination of the two companies will create a scaled connection between global and local communities on one platform. This will create a new way for people to get local and global information in a timely and entertaining way.
This acquisition will create a high-quality and diverse digital ecosystem encompassing local, national, and international news, politics, entertainment, technology, fashion, sports, health, personal finance, green, lifestyle, the arts, and more. This deal will combine the amazing talent at Aol with the innovative and talented staff of The Huffington Post.
To maximize the strategic advantage of this great deal, we will be creating a new group at Aol called The Huffington Post Media Group. Within this group will be Aol Media, Aol Local & Mapping, Aol Search, and our new friends at The Huffington Post. We will continue operating the towns structure, Aol.com, and HuffingtonPost.com.
I’m thrilled to announce that Arianna Huffington will join Aol’s executive team as president and editor-in-chief of The Huffington Post Media Group. We have asked Jon Brod to lead the overall operational integration on the Aol side of the combined entities. Jon will lead the local group integration and work closely with David Eun and the teams in Aol Media. We will work quickly with The Huffington Post to create a combined organizational design to coincide with the deal closing. While we wait for the required regulatory reviews to be completed and the transaction to close before implementing the design, we will move very quickly to plan the details of the integration of the two companies. To this end, we will announce the new organizational structure as soon as possible.
Aol is playing to win…and The Huffington Post and Aol will occupy a unique place in the future of the Internet. Let’s go get it done.
And Huffington wrote in her post on HuffPost announcing the deal:
When Kenny Lerer and I launched The Huffington Post on May 9, 2005, we would have been hard-pressed to imagine this moment. The Huffington Post has already been growing at a prodigious rate. But my New Year’s resolution for 2011 was to take HuffPost to the next level — not just incrementally, but exponentially. With the help of our CEO, Eric Hippeau, and our president and head of sales, Greg Coleman, we’d been able to make the site profitable. Now was the time to take leaps.
I got an email from Tim Armstrong saying that he had something he wanted to discuss with me, and asking when we could meet. We arranged to have lunch at my home in Los Angeles later that week. The day before the lunch, Tim emailed and asked if it would be okay if he brought Artie Minson, Aol’s chief financial officer, with him.
The next day, he and Artie arrived, and, before the first course was served — with an energy and enthusiasm I’d soon come to know is his default operating position — Tim said he wanted to buy The Huffington Post and put all of Aol’s content under a newly formed Huffington Post Media Group, with me as its president and editor-in-chief.
At some point during the discussion, while Tim was talking about his plans for turning Aol around, he said that the challenge lay in the fact that Aol had off-the-charts brand awareness and off-the-charts user trust and loyalty, but almost no brand identity. I was immediately struck by his clear-eyed assessment of his company’s strengths and weaknesses, and his willingness to be so upfront about them.
There were many more meetings, back-and-forth emails, and phone calls about what our merger would mean for the two companies. Things moved very quickly. A term sheet was produced, due diligence began, and on Super Bowl Sunday, the deal was signed. In fact, it was actually signed at the Super Bowl, where Tim was hosting a group of wounded vets from the Screamin’ Eagles. It was my first Super Bowl — an incredibly exciting backdrop that mirrored my excitement about the merger and the future ahead.
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.
Far from changing our editorial approach, our culture, or our mission, this moment will be for HuffPost like stepping off a fast-moving train and onto a supersonic jet. We’re still traveling toward the same destination, with the same people at the wheel, and with the same goals, but we’re now going to get there much, much faster.
We can’t wait to begin the ride.