June 6, 2011

"12 Reasons Why The AOL-Huffington Post Merger Is Going Down In Flames."

Is this believable or the result of various disgruntled employees leaking their side of the story?

39 comments:

Seven Machos said...

The Huffington Post is a pretty great site with a great business model that has a fatal flaw. This entity was built on the back of free labor.

As labor costs rise, and they must, Huffington Post becomes another Salon.

Brennan said...

I wonder what Daily Kos would be like if Markos had to pay the kidz.

Probably like Huffington Post.

Brennan said...

As labor costs rise, and they must, Huffington Post becomes another Salon.

But the new media might mean that's good...for Arianna. It's worked out for Tina Brown. She turned Salon into doom, turned that into the Daily Beast, and turned that into the Newsweek acquisition.

Look at that success. That's three publications that aren't worth reading at all. It's gold baby.

Marshal said...

This article doesn't mean much. The merger will ultimately fail because AOL doesn't provide value. Effectively it serves as a content screener, and tries to be one for everyone. Only those afraid of the internet want this. It's a sinking ship and Huffpo doesn't bring a game changer to the table.

If true the complaints in the article may hasten the obituary, but they're incidental to the organization's success.

Seven Machos said...

I don't think Tina Brown ever worked for Salon. What she did was turn around a moribund New Yorker. No small feat.

But that was then. She is now going on her second disastrous failure.

Phil 3:14 said...

So far, according to a reader, the intergration is going very badly

According to A reader.

You mean the SF Chronicle wrote an entire article based on the opinion one anonymous reader!!! (and reader or what?)

John Lynch said...

Something I've noticed- the editing of articles on the internet has declined in quality over the last year. There are grammatical mistakes everywhere now, even in major publications. It's tempting to blame it on spell check and the lack of human editors but even MS Word's grammar check would have caught many of the errors. Do people just not care?

Also, the general quality of writing has declined as well. Maybe this is what comes of not paying anyone for content.

Martin L. Shoemaker said...

The two big lies in any merger or acquisition:

1. Nothing's gonna change.

2. Nobody's gonna lose their jobs.

When these are revealed as lies, people get nervous, maybe they even panic, and they start leaking scare stories to the world.

That doesn't make the scare stories false; but it means you shouldn't accept them on face value, either.

wv: trawfici. What AOL expected from HuffPo.

Seven Machos said...

John -- I shudder to think what would happen if Althouse stopped paying us!

crazy legs said...

It never made sense to me that AOL paid for HuffPo, yet they basicaly turned over the control of the organization to Arianna...

So this is my "insider" info in all this, which is second-hand from an AOL mid-level employee, who works on the tech side, building AOL's webpages.

AOL's been having trouble for years. My friend has weathered many a lay-off (some of which included thousands of employees). None of this is news. But in the most recent lay-off, my friend lost about 80% of his team. Nearly all the most recent lay-offs were of staff in Bangalor, India. So there's a question: why would you be firing nearly a thousand people, and pretty much all of them are Indians working for far less than their American counterparts?

My friend also says that since the merger he's had two office changes (he had a cubicle before the HuffPo merger), and now he doesn't even have the cubicle! His latest "office" is a 5' length of countertop, shared with other people. So basically, there's currently no privacy, and not nearly enough room for all the equipment he needs, much less personal mementos. So question number two: is Arianna responsible for making working conditions so unpleasant for long-time AOL employees that they'll be driven to quit?

From the article and my own second-hand knowledge, I'd guess that HuffPo is planning on stripping anything of value from AOL before jettisoning it.

Bruce Hayden said...

You wonder why AOL still exists, and then you run into someone who has an AOL account, and cannot effectively communicate with anyone who does not,and so you use your old AOL account that you haven't used for the last year or so.

The problem with this as a business model is that eventually most people discover that AOL is more trouble than it is worth, and seriously gets in the way of getting much done on the Internet, and bail.

Of course, turnaround is always delicious. Time Warner thought that they were buying into the 21st Century when they merged with AOL. I had little sympathy for them, since Ted Turner, still married at the time to Hanoi Jane, had sold out to them and was active in the company. AOL had a stupid business model then, and it hasn't improved with age.

So, this time around, AOL is the desperate one, and they are the one taken to the cleaners. Good for them.

David said...

It's certainly plausible. Did Huffpo have people with the skills, patience and judgment to identify and leverage the strengths of AOL? Is there hands on executive experience at the top, or just publicity skills?

Time will tell, but all the items identified are potential weaknesses of the combined enterprise.

rhhardin said...

Whatever happened to Compuserve?

Send mail to 70277,2502@compuserve.com and see if Rush gets it.

Seeing Red said...

The locusts consume again.

Fred4Pres said...

First a Weiner roast and now this? Wow, what a summer of fun this is turning out to be.

Seven Machos said...

Reading the article, it's hard to believe that it's true that Huffington Post is rolling websites into Huffington Post. That's simply antithetical to the way the Internet can be successful, by reaching micro-audiences.

I am surprised AOL is still around. It was a flash in the pan that made a ton of money but it's day is long past.

The Crack Emcee said...
This comment has been removed by the author.
The Crack Emcee said...

John Lynch,

There are grammatical mistakes everywhere now, even in major publications.

I noticed the same thing. And was just as disturbed.

PrincetonAl said...

It sounds to me like most ill-thought out mergers. In other words, a real charlie-foxtrot. In absence of real strong business leadership, what happens after the deal closes is a scramble to grab power, line pockets, and prepare an alternate landing if you have talent - or grab a plum position and ride the gravy train if you don't. Relationships, nepotism, backstabbing, and agendas driven by anything but personal gain come to the forefront quickly, and destroy any reasonable business culture. A situation that can take a long time to fix once the damage is done.

The question is whether it will materially impact the actual influence HuffPost has for the foreseeable future. That would be too good to be true. ... But never underestimate the half-life of an incompetently run business and brand. It can take some time to run into the ground, especially if the business has cash and a willingness to burn it :-)

But as for the non-HuffPost properties, it plausibly could tie up the rest of the AOL properties and any larger ambitions in knots for a while, drain them of talent, direction, and resources - and the financial impact of that could be a boat anchor ultimately for everything.

My prediction: short term HuffPost does fine, while everything else suffers. Long-term: slow and steady decline.

The Crack Emcee said...

Seven Machos,

The Huffington Post is a pretty great site with a great business model that has a fatal flaw. This entity was built by Arianna Huffington.

There, now it's right. Sorry, but it just occurred to me that your 7 Machos demanded a Response.

And I'm just the man to do it.

gerry said...

I cannot remember where I read it, but when AOL went nuts and bought the Puffington Host, the comment was something like, "Well, it means the end of this run of populist, progressive liberalism: Huffington knew when to switch sides and get in, and now she's signaled it's time to get out."

And she made a bunch of money off her lackeys while doing it. Not bad for a quasiMenshevik.

edutcher said...

AOL's glory days were 10 - 15 years ago when it and Compuserve the the only real players.

That Arianna had to sell Puffington seemed to me a sign of trouble, so we'll see.

Fred4Pres said...

First a Weiner roast and now this? Wow, what a summer of fun this is turning out to be.

Wait till the markets crash and the economy collapses and the Obamatrons start rioting in the streets when they realize the Messiah was a false Profit (spelling intentional).

Fred4Pres said...

Ariana Huffington is clearly the greatest manager of people evah. We need to change the constitution so she can run for President. Then we could be just like the Greeks. Broke and bitching all the time.

Sorry, I am just in a dysopian mood.

Carol_Herman said...

Well, are you surprised?

Where did Putz Ho ever prove she provided readable commentary?

AOL "You've Got Mail" also lost customers.

$305-million? It was a deal meant to rip off investors. But it didn't start another dot-com bubble, now did it?

Triangle Man said...

Sorry, I am just in a dysopian mood.

I hate that little freckled punk too.

A. Shmendrik said...

At the time of the AOL acquisition of The Huffington Post - there were some interesting financial anlyses in the press. I recall reading in one account that, at the time, 40% of AOL revenue came from dial-up service subscriptions. Seems quite hard to believe at first glance. But then again, my 81 year old mother was on AOL for ~10 years, and kept the dial-up subscription going for 2 years after she had DSL and could access the free AOL.com site via the web. I hate to think of how much of their revenue stream is just that - people who don't yet realize that they shouldn't pay for something which is available free. Now that's a bad business model.

Fen said...

Hope for an asteroid strike?

Lem said...
This comment has been removed by the author.
MadisonMan said...

This is completely off topic, but Happy DDay everyone. Hard to imagine that everyone who participated in it is now an octogenarian with room to spare.

LakeLevel said...

Seven Machos: John -- I shudder to think what would happen if Althouse stopped paying us!


waaaait a minute! You're getting paid? Why I otta.... (melee ensues.... Althouse.blogspot.com is gone within a few weeks)

Der Hahn said...

There are still times and places where dial-up is the most viable option. Though slower it's more reliable, cheaper, and more portable than a dish connection. I kept a NetZero account for years at $120 a year as cheap insurance for interruptions of my main DSL account and for access in out of the way places like my father's farm. If you use phone cards to pay the phone charges you don't spend a lot for casual access.

I think what's really killing AOL etc now is smartphones. I can't get a reliable 3G connection at my dad's farm in the wilds of north Iowa yet but I can use my smart phone there, and do almost everything I would have done with an internet connected laptop.

BJM said...

This reminds me of the dynamics of the MCI-WorldCom merger...the two corporate cultures were so different that merging the companies proved almost impossible and working at cross-purposes they lost their market share.

Jose_K said...

Aol is like the Hydra or the blob, it refuses to die. It began censoring internet, Then the merger with Warner and now HuggP. Can they do something right?

Roy Lofquist said...

Well, I go back to the dial-up days. I even go back to the days of the 300 baud acoustically coupled modem. For those who don't remember, you dialed your phone, waited for the whistle, then put the handset in the cradle of the modem.

Anyway. Back in the days of dial-up AOL seriously pissed off gazillions of people. They placed "Free 30 Day Trial" CDs in markets and convenience stores all over the country. When you signed on they took your credit card info "for your convenience. remember you can cancel within 30 days".

You couldn't cancel! When you called the cancel number they ran you by at least three people who gave a sales pitch then put you on hold. A little pretty music then a dial tone. To this day I avert my eyes in horror when ever I see those three letters.

Their management was as fucked up then as now.

mariner said...

John Lynch,
Also, the general quality of writing has declined as well. Maybe this is what comes of not paying anyone for content.

Maybe it's what comes of giving writers' jobs to people who can't spell and can't write English sentences.

rhhardin said...

I use a dial-up every day M-F - it makes a backup stream recording of Imus, against the possibility of the DSL going out, which it sometimes does.

Of course they're both on the same phone line, but the phone line itself seems to stay up except for power outages lasting more than four days when the substation backup power gives up.

mariner said...

Is this believable or the result of various disgruntled employees leaking their side of the story?

I'll take choice C: it's believable AND it's a result of disgruntled employees telling their side of the story.

ken in sc said...

I still use my AOL address because it is my name. I have been online since usenet an other bbs's, I was actually on Arpanet too when I was in the Air Force. Compuserve and AOL, were ground breaking services. They are like steam engines now.

ken in sc said...

I forgot about Sabra-net for making airline reservations in the 80s.