AOL and HuffPo

[First, a disclosure: I used to be in charge of AOL News for four years. Looking back, folks might say it was an old school, main stream approach to news. We cared about accuracy and speed, credible information, the best news brands but also being fast and responsive and driving discussions. Did it work? You bet: our numbers showed AOL had a larger readership than the top 5 newspapers in the world; all with a staff of 10. We broke stories. We did a lot of firsts that people now claim to have done. ]

WHO BOUGHT WHOM?

HuffPo just got a deal that gets them 10 times their value and Arianna gets total control over all content on AOL. It looks to me as if AOL paid her to take over most of what makes AOL, AOL.

STRATEGY?

Somewhat brilliant..if they can keep the wheels on. Within 18 months we will be fully into another presidential election cycle, and if Arianna and her happy band of bloggers and such can keep it together, they SHOULD benefit from what we knew at AOL in years past: all news traffic peaks early and stays long during and immediately after a presidential election. AOL will be able to crow about pageviews and more til the votes come in.

BRAND MATTERS

No secret here and it is one AOL has followed for years: branded content is valued above everything else. AOL is a company with a marketing midset and that says, in short, that consumer behavior is largely predictable. Brands might change (I worked with the NYTimes, ABC News, Bloomberg and others...) but consumer's appeal TO brands and brands desire FOR consumers never ends. HuffPo is a huge new media brand that carries with it a name and an audience. It fits AOL.

EXECUTION

First, if you work in Patch, Seed or any AOL-created properties beware. Ask anyone who worked at AOL's Digital Cities, AOL Hometown, AOL Journal what happens to AOL-created brands. In the battle for brands, AOL tosses over its own for brands it acquires or partners with. And even then the HuffPo folks should keep a light on: ask the people at CompuServe, Bebo and Netscape, among many others. HuffPo could become the exception except consider the challenge of...

number Two; these mergers and strategic plans take incredible managerial talent and discipline to recover their costs and fulfill promises. Mismatched cultures (AOL's walled garden, the open web and bloggers?) helped derail the AOL and Time Warner marriage. But so did poor management and confused leadership. Are things better now? Others know more than me about the managerial skill and focus of AOL and HuffPo.

QUALITY

HuffPo is a candy site for me: you're curious about a weird headline or scandal and you get your fix. Latest on John Edwards? Sure, why not.
But you want some real depth and perspective? The flight to quality does not take me to HuffPo, even though it has SOME good reporters.
HuffPo is not a news habit; it is the candy at the check out lane. The quality is 'eh.'

NEW?

AOL News was a powerful aggregator when I worked there. We parsed thousands of news stories a day through the servers and you could find the latest story on Boilivia or Lichtenstein with a simple search. But we spent the man-hours on headlines, selecting photos and certain stories to bubble to the top. And, worked with news partners days ahead on the stories they would publish on newsstands at the same time we would. Over time, audiences didn't have to go to the newsstand; they came to AOL.

So, aggregation is in AOL's blood and they can do it well. And, when they do it well, content and convenience win. Add in HuffPo's SEO mania and you could make the case this merger has nowhere to go but up.

Is this just an updated aggregation strategy? Is the current AOL audience of older dial-up customers going to come to HuffPo? Will HuffPo readers feel a bit strange about seeing AOL on their browsers and iPhones? Will HuffPo's presence force some brands and partners to leave, concerned for an association with Arianna?

Let's see how this all looks in 18 months. I think the numbers will take care of themselves, but will the content and the buzz hit new heights too? It comes down to content, not just navigation

IS THERE A LOSER?

I'll go out on a limb and suggest...yes, the NYTImes.com. With a pay wall looming that means more barriers to linkage (not completely, but let's say hurdles - real and perceived), sharing, contextual value and browsing.

Reuters has some analysis that makes sense to me:

One of the paradoxes of news media is that most of the time, the more you’re paying to use it, the harder it is to navigate. Sites like HuffPo make navigation effortless, while it can take weeks or months to learn how to properly use a Bloomberg or Westlaw terminal. Once the NYT implements its paywall, it’s locking itself into that broken system: it will be providing an expensive service to a self-selecting rich elite who are willing to put in the time to learn how to use it. Meanwhile, most Americans will happily get their news from friendlier and much more approachable free services like HuffPo.

So, Arianna goes to AOL and leverages her brand to, perhaps,...a marketing and advertising conglomerate that built a business on convenience. She does this in the same quarter as one of the most recognized news brands decides to go behind a pay wall (second time for the NYTimes). Let's see who comes out on top in a race to the next presidential election.

WHAT ARE THE STAKES?

For Arianna, she needs page views, new eyeballs and AOL needs to completely turn around a diving advertising trend because it can sell new high brand inventory.
For the NYTimes, it will be a race to see if subscription dollars more than offset the losses in site traffic and, presumably, ad sales.
And then there is the reason anyone would click in the first place: who has the best stuff that the most people want, or want most often?
Will HuffPo be able to link to NYTimes.com stories? Could HuffPo be a key driver to NYTimes.com? Or, will an army of HuffPo bloggers unleashed for the campaign swamp the field and overwhelm traditional reporting.
Or...does the NYTimes have something up its sleeves that turns the audience into contributors?

Many years ago I suggested to NYTimes.com editors that they focus on continually updated news, a focus on people and citizen contributions to the NYTimes.com pages matched with depth and context. And photos -- many more photos. At the time, they looked at me like I was from Mars.

Since then they have done most of these things (NOT because of my suggestions, of course)...but the reader role (forget About.com) is still missing.