News today that AOL has agreed to pay $315 million to acquire the news blog The Huffington Post is raising fresh questions about what these online services are worth and what – exactly –AOL is getting out of this deal (aside from the 26 million unique monthly visitors that Huffington claims).
26 million is a lot of eyeballs (I guess that’s 52 million eyeballs), but Huffington’s product is essentially rewrapped content largely siphoned from mainline media that itself is still trying to figure out how to get back into its own game. AOL – the first online delivery system to be featured in a popular movie – has likewise been trying to figure out how to get back into a game they largely invented. AOL’s ascendency was pretty much in 1998 when they were positively portrayed in “You’ve Got Mail.” They have been on the down slope pretty much ever since the popular romantic comedy.
It was then that another social network was created that would eventually spawn another hit movie.
What would be the title of The Huffington Post movie? Maybe The Aggregators – a story about a Greek Republican woman and published author who marries a billionaire, runs unsuccessfully for political office and then starts a news blog as an outlet for her unrequited political opinions.
The irony of all this is that The New York Times in 2009 couldn’t convince investors to pony up $50 million to buy The Boston Globe – a frontline media property with tangible assets that the Times had paid $1.3 billion for just 15 years before.
The mystery in these matters is what exactly does the purchaser get when they plunk down $315 million for the Huffington Post? Or, for that matter, how does Facebook qualify as being worth $50 billion, as Goldman Sachs decided and has pledged (now stalled) to raise $1.5 billion in private investments? One theory is that what AOL and Goldman Sachs really have in common is not their separate bids for social media properties but their transparent attempts to dust off their current reputations as two fading and tarnished companies that are no longer the big players they were once upon a time.
Presumably these folks know what they are doing and understand that the actual value of these properties may be a bit illusory, but Facebook and The Huffington Post – while leading examples of the social media revolution – barely existed a half dozen years ago. And now they are worth $50 billion and $315 million, respectively?
I certainly hope so, because I have an idea for a social media platform that could be something special and I would be willing to part with it – undeveloped – for $100 million.