You Can Make Friends, But AOL Wants To Influence People

The online world may be consumed with making friends with social networks, but born again publishing portal AOL wants to influence people. That's the rationale behind AOL's $315 million acquisition of The Huffington Post, according to AOL chief Tim Armstrong. In a memo to AOL staffers, Armstrong said the deal is part of a long-term strategy to acquire and develop content that are "destinations for an influence audience."

The acquisition of The Huffington Post, which was announced after midnight this morning, while much of the media world was musing over Super Bowl champion Green Bay Packers, and the not-so-clear winners among a tepid array of Super Bowl advertisers, comes only months after AOL acquired technology blogger TechCrunch, reportedly for an estimated $30 million.

Interestingly, it seems AOL placed a greater value of the influential reach of The Huffington Post's 25 million monthly uniques than on TechCrunch's 3.8 million. AOL paid roughly $7.90 per TechCrunch's monthly unique visitor, but is paying $12.60 per The Huffington Post's.

That could be because The Huffington Post represents greater scale, or it could be that it's political insider and influencer bent has a greater underlying value than TechCrunch's technology, VC and media industry base.

"Uniquely, The Huffington Post is the platform for influential people," Armstrong said in his AOL staff memo, "the people that drive trends, commerce, politics, entertainment, news, and information. Adding this strategic platform to our already strong network of sites, including the AOL homepage, has the potential to make AOL the most influential company in the content space."

As part of the deal, AOL named The Huffington Post founder Arianna Huffington president of the The Huffington Post Media Group, a new unit within AOL that includes HuffingtonPost.com, AOL Media, AOL Local & Mapping, and AOL Search.

AOL's differentiated media brands now also included Engadget, AutoBlog and Moviefone.

With the addition of The Huffington Post, AOL's combined media group will have a monthly unique reach of 117 million Americans, and 270 million worldwide.

The acquisition is interesting, because it's not simply about reach for reach's sake, but all about AOL aggregating discrete pockets of influential users, which Armstrong said could be converted into potential consumers of AOL related commerce opportunities. He said he calls the strategy AOL's "80:80:80 focus," which is based on the theory that 80% of domestic consumer spending is done by women, that 80% of it is done locally, and that 80% of "considered purchase are driven by influencers.

"The influencer part of the strategy is important and will be potent," he emphasized.

That statement, in light of The Huffington Post acquisition, is telling, because other big online publishers and communities also tout the power of influencers, but less so from a content point-of-view. Big social networks such as Facebook are all about enabling users to influence each other, and figuring out ways of integrating brand communications into their conversations, or at least adjacent to them.

The big online search organizations such as Google, meanwhile try to influence people on behalf of brands based on what they are looking for, or what people on Madison Avenue now call "intent."

So AOL, in effect, is going old school, and saying that when it comes to making friends and influencing people, content may still be king. The right content, that is.

1 comment about "You Can Make Friends, But AOL Wants To Influence People".
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  1. Rob Frydlewicz from DentsuAegis, February 7, 2011 at 11:11 a.m.

    Just $315 million? I guess Arianna was too impatient to wait for an offer from Google for $3.15 billion.

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