It has just been announced that Huffington Post has been purchased by AOL for $315 million. What does this mean? Why not let Arthur Jensen explain:
I found this bit from Om Malik at gigaom.com very instructive:
Huffington Post was valued between $300 million to $450 million in 2010 according to Bloomberg. In that story that ran on December 14, 2010, Huffington said: “It’s working. Everybody’s happy with how it’s going. Nobody is in a hurry to cash out.” Ironic, considering that was around the time, Armstrong was trying to buy the company.
I think Om is being a bit generous with choosing the word “ironic”. I mean, if she’d be that plainly dishonest for no reason, what might she do for 350 million reasons?
It’s not as if the corporate buyout of Huffington Post will come to many familiar with it as a big surprise. This was the ultimate goal of the hedge funds that financed and controlled this business.
This is a great thing for them and Arianna who have now profited immensely from the freely contributed time and energy that many have and continue to invest there (don’t hold your breath waiting for any trickle down of any of that $315 million to those blogging at HP). However, as every mega-corporate buy out of an independent news or media entity has shown (we still miss ya KO), integrity does not increase with corporate revenues, just the opposite. Principles and civic responsibility are disruptive to profit.
Here we are in the 21st Century, with the wealthy and corporations, the Kochs and Comcast and AOL avidly buying up or buying off whatever aspects of free expression they can.
And the sadly Orwellian aspect of this is that, alongside Fox News spouting “Fair and Balanced” there will no doubt be the aggressively promoted doublespeak from HP about how “Independent” and “Progressive” they are.
Let’s be real, being owned as part of a $4 billion media empire is not what most of us consider being independent or Progressive…unless one is pursuing “progress” towards a fully corporately owned America.
Now, does it really matter that the business represented as the most popular and influential Progressive blog site is owned by a mega corporation? Let’s ask the wolf in sheep’s clothing on the street. Or better yet, consider the following.
There is an inescapable conflict of interest when an entity that represents itself as a news and opinion organization is owned and operated by a corporation worth over $4.2 billion dollars that has business interests and investments in myriad other businesses.
There is one fact about corporations that must be recognized. Corporations have no responsibility to the society they exploit for their revenues, they have only one legal obligation…to make as much money as possible. Shareholders can in fact successfully sue those running a corporation if such decision makers ever chose to be socially responsible at the expense of generating the most profit.
So, it is a fact now that Huffington Post’s first and primary responsibility is to enrich the shareholders of AOL.
How might it affect HP’s reporting and opinions if it is in AOL’s financial interest to oppose tax increases on the wealthy? Or healthcare reform? Or employer sanctions for hiring undocumented immigrants? What if AOL believes deregulation and a Republican president would be more financially beneficial?
If Huffington Post campaigned against what was in the best financial interest of its shareholders, those in management could indeed be sued or replaced.
Also, when a powerful and wealthy business or individual buys up another business, the first thing they typically do is try to recoup the expense of buying that business. For a media business, that means they need a lot more viewership to boost ad revenue.
How might that be accomplished? How might that integrate with the operation of Huffington Post as a place of independent, Progressive and anti-corporate thought?
It now may become much more clear to some as to why there have been all the attacks on Obama at HP by Arianna and others, the conspicuous focus on and all the attacks on his financial team, the inexplicable moderation applied and manipulation of conflict at the site (which generates greater traffic) and Arianna’s having a fun time with Newt Gingrich on vacation and “palling around” with Darrell Issa at another elegant event.
At this point, one either bets on Arianna having unshakable principles upon which she is prepared to sacrifice whatever is necessary (ask Mike Huffington about that)…or that hundreds of millions of dollars speak louder than blogs.