Q 1Q 1
The Huffington Post: How a Single Voice Became Many
The Huffington Post began life as just another liberal blog in an already crowded field; it aggregates news from other sources, but eventually it grew into a full-fledged news organization. The Huffington Post is an unlikely success story, built in large part on the notoriety of Arianna Huffington and her allies. According to a Washington Post article, "skeptics dismissed it as a vanity outlet for [Arianna Huffington] and her Hollywood friends. But the Huffington Post has become an undeniable success, its evolution offering a road map of what works on the Web."
Arianna Huffington was born Arianna Stasinopoulos in Greece, educated in England, and gained wide fame as an author, conservative columnist, and popular commentator in the 1980s and early 1990s. She is the ex-wife of former Republican congressman Michael Huffington. In the late 1990s her views shifted radically to the left. She explains her change in political leaning during a 2008 Time interview: "I left the Republican Party [because] my views of the role of government changed."
On May 9, 2005, Arianna Huffington, Kenneth Lerer, and Jonah Peretti launched the Huffington Post with about $2 million in seed capital. The website consisted of little more than a few blogs and some basic political news. It drew on news stories published by reputable news organizations, as well as the general public, "but what set the Huffington Post apart was the humor with which it was delivered. This is not to say the publication did not have a serious point to get across." Indeed, the Huffington Post positioned itself to be the liberal counter to right-wing media.
In August 2006 the Huffington Post announced its first round of venture capital funding, with a $5 million investment from SoftBank Capital, which enabled the publication to increase its staff with in-house reporters who could update the site around the clock as well as a multimedia team to produce video reports. Among the new hires was a political editor, Melinda Henneberger, a former Newsweek magazine print journalist, who brought conventional journalistic credibility to the publication. Just a year after its launch, the site drew approximately 2.3 million unique visitors a month, thus making it one of the more popular blog sites.
In early 2008 the site garnered 3.7 million unique visitors and enabled it to beat out its conservative competitor, the Drudge Report , for the first time. Its success drew further funding in 2008, with an additional $15 million investment, which allowed the publication to "finance the expansion of HuffPo, as it is known, into the provision of local news across the United States and into more investigative journalism."
Ms. Huffington faced several significant challenges in cofounding the Huffington Post. At the time, the landscape was dominated by powerful conservative voices, such as the Drudge Report. Moreover, the failure of other liberal blogs to draw huge audiences or active participation had produced a conventional wisdom that progressives were simply not interested in this type of content or interaction. Hence, convincing advertisers to support a liberal blog site would be a herculean undertaking. In addition, "[w]hen she launched her group blog in 2005, skeptics dismissed it as a vanity outlet for her and her Hollywood friends." Lastly, the meager seed capital of $1 million had to be supplemented before long.
In short, Arianna Huffington had to quickly prove that a liberal blog site could not only capture but sustain a sizable readership before investors or advertisers would make any commitments.
Ms. Huffington's two objectives were obvious: drive traffic to the blog site and keep them coming back. "In 2006, she was named to the Time 100, Time magazine's list of the world's 100 most influential people." As a popular cable talk show pundit, author, and notable proponent of the political left, she took every opportunity to promote the Huffington Post. With appearances on shows ranging from Real Time with Bill Maher and Charlie Rose to The McLaughlin Group and Larry King Live , she continually drove traffic to her namesake fledging blog site.
In addition, the staff of the Huffington Post became adept as news aggregators in identifying the most compelling content on the web that matched its left-leaning editorial slant, as well as some juicy celebrity gossip, and reposting portions of these articles on the blog site. Ms. Huffington's editors are especially skillful at optimizing these story snippets "for search engine results, so that in a Google search, a Huffington Post summary of a Washington Post or a CNN.com report may appear ahead of the original article." This practice is not without its critics. Indeed, Jack Shafer, who covers media for Reuters.com opinion section, characterized it this way: "Huffington glories in carving the meat out of a competitor's story, throwing a search-engine optimized (SEO) headline on it, and posting it." The company site defends the practice as falling under the fair use doctrine. As the funding and ad revenues for the Huffington Post grew, the site eventually hired in-house reporters, columnists, and investigative journalists to create original news items to complement the content it aggregates.
To achieve Huffington Post 's second goal of retaining readership, it was clear from the start that it had to provide quality content from well-known political posters. Ms. Huffington led the way as a prolific blogger. In addition, she initially relied heavily on her impressive "rolodex of A-list celebrities and high-powered friends, soliciting early contributions from the likes of Larry David, Diane Keaton and Alec Baldwin." Soon other notable voices followed, and, perhaps most importantly, the site threw open its doors to a legion of bloggers. Although bloggers received no remuneration, tens of thousands of posts poured in. This approach was not without its critics, as CNET writer Josh Wolf indicates, "[i]n most industries refusing to pay your labor force is not only unethical, it would likely border on slavery and be illegal as well. Apparently in the world of blogging it's considered good business practice." The company justified the practice by saying they offer bloggers "visibility, promotion, and distribution with a great company" in exchange for their contributions. Finally, Ms. Huffington's role in fundraising played a key role in the blog site's success because it gave the site the capital necessary to rapidly expand its staff and infrastructure.
Today, the Huffington Post is the number one blog in the blogosphere. It has over 9,000 bloggers, with approximately 25 million visitors every month. The viewership, content, and success of the Huffington Post have not gone unnoticed. The site won the Webby Award for the best political blog in 2006 and 2008 and was the People's Voice Winner in the political blog category in 2009, 2010, and 2011. Time named it the second best blog in 2009.
As with other successful blog sites, AOL snapped up the Huffington Post in February 2011 for $315 million. Arianne Huffington was appointed president and editor-in-chief of the Huffington Post Media Group at AOL in order to help ensure continuity in the quality of content and contributions. Some fear that HuffPo 's distinctive viewpoint may be compromised by a loss of independence. However, Huffington Post executives claim that "[t]he AOL deal has the potential to create an enterprise that could reach more than 100 million visitors in the United States each month... [and we] estimate that the Web site will generate $60 million in revenue this year, compared with $31 million in 2010." Whether such optimism is justified remains to be seen. It is worth noting that publication expanded into Canada in May 2011, a promising sign that the site is aggressively attempting to expand its readership.
However, there has been a dark cloud on the horizon for the blog site. In April 2011 Jonathan Tasini, a well-known labor advocate, filed suit against the Huffington Post in the United States District Court of New York on behalf of 9,000 uncompensated bloggers. He is alleging damages of over $105 million. Ms. Huffington was quick to counter, asserting the blog site is two things, "[a] journalistic enterprise, hiring hundreds of journalists with benefits, great salaries and we are a platform that is available to anyone who does quality work to disseminate their ideas, promote their books, movies, political candidacies or whatever it is they are engaged in." The courts will determine if this is, indeed, the case.
Review Questions for the Huffington Post Case Study
1. Arianna Huffington drew on some of her celebrity contacts early on to popularize the website. Do you think a person without her connections could have been equally successful? What strategy changes would a non-celebrity have to make to succeed?
2. Do you expect that AOL's purchase of the Huffington Post will have a largely positive or negative effect on its viewership? Name some pros and cons, and compare them.
3. Beyond Arianna Huffington using her celebrity contacts, what other strategies did the staff implement to make this the number one blog in the blogoshere? Can these same strategies be applied to other blogs? Explain why or why not?
4. What are the possible strategic marketing benefits and drawbacks of the acquisition of the Huffington Post by AOL? Explain.