What to read into AOL’s acquisition of The Huffington Post for 32 times earnings? Another sign of a social media bubble? A bid for respectability by the corporate that, for many, has defined the unsuccessful merger?
Just as importantly, I’m struggling to get my head around the brand compatibility. Huffington Post – smart, sassy, informed. AOL – huge (though nowhere near as big as it was), dial up, looking to get back some high ground. Seems like Huff is looking for scale here, while AOL is looking for the quality they believe will drive advertising sales. I hope this doesn’t turn into a bun-fight between resources and returns. I’d also hate to see Huff Post’s integrity and feisty character compromised by the juggernaut.
And while Arianna Huffington herself may have done this partly because she’s worried that the Post is erring towards “the innovator’s dilemma” of sticking too closely to its strategy, I’m sure I don’t need to remind her that corporate history is littered with the wrecks of brands who tried to be too clever, forgot their core business or diversified/expanded their way into oblivion.