Although media stocks in general were hammered last week by bad news, AOL’s (NYSE: AOL) disappointing quarter had a big impact in my house. The company's shares lost a third of their value in two days.
Apparently, the merger with Huffington Post hasn't been as successful as Arianna Huffington suggested in March, when some enthusiasts dubbed the combined company AOLington Post. Having been involved in one of the century’s worst corporate mergers with Time Warner (NYSE: TWX), AOL seems to have done it again.
I was especially sensitive to AOL’s $315 million bet on Arianna.
It must have had high hopes her presence might reverse a decade-long
decline, which I can understand.
I had high hopes when I became one of the original founding 974
writers, without whom none of Arianna's expansions would have been
In 2005, HuffPo had all of these Hollywood sixteen-wheeler
machers, like Tim Robbins and Rob Reiner, speaking out on topics they
may have known something about or not. You needed social climbing shoes
by Jimmy Cho or Whatshisname Blahnik to be in that punditocracy.
By 2007, when I was asked to join, the engine of HuffPo's drive to
the top was a stable of distinguished contributors like myself, a
veteran of 35 years as the media critic at Newsday.
My starting fee was zero. After 38 posts, it had skyrocketed to zero.
What a business plan, I remember thinking at the time (before I
stopped being such an idiot). A prominent leftist, Arianna was no Eugene
Debs. She had seemingly discovered the principle of not paying the
laboring force. This is free market capitalism in its purest forms, I
marveled. Everybody works for free, a capitalist's wildest dream come
The Huffington model must have appealed to AOL’s chief executive, Tim Armstrong.
Of course, it was the old Tom Sawyer scam. Arianna Huffington was
getting people to paint her fence. (It had also worked for the
Egyptians in building the pyramids.)
In her early days, Arianna was a far right conservative, then a
moderate, now a raving liberal. One could admire her flexibility in
politics. In her latest vision, she was giving her dahlings -- she calls everybody dahling -- the chance to share our seditious thoughts with the world.
Beware of Greeks bearing gifts, my mother always told me.
We dedicated dahlings were ready to have a TV telethon to keep Huffington Post alive. And then came the shock of the $315 million sale.
Cynics could understand she needed money to maintain her
lifestyle in California. But who would pay $315 million? AOL! It seemed
insane. The corporate whizzes weren’t buying a major publishing chain,
but a mere blog.
The upside to what some may think is another brilliant con job pulled on hapless AOL is that the merger has made Arianna the dahling of cable network news.
I am one dahling who thinks she is not that good on TV. My
favorite in the competition to become leader of the Power Ladies of the
Left on cable news is Katrina vanden Heuvel of The Nation. Arianna is more suited to be a character in Spider Man.
It may be too early to close the books on the AOL-HuffPo merger.
Arianna will think of something. My guess is that AOL will start by
eliminating salaries. And before we know it, it will be The Huffington Post, formerly AOL. And the young whiz charmed by Lady H will find his desk out in the parking lot along the information superhighway.