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by Stephen Logan on 7th February 2011
The investment in content over at AOL has picked up further pace with the purchase of the Huffington Post.
Barely a week after AOL leaked their content master plan, it has been announced that the online company are investing $315 million in über-blog the Huffington Post. Whilst not huge news outside the United States, this buy-out has a number of ramifications that impact the wider world.
The first of these of course is that AOL will now be producing a huge percentage of the content seeping onto the Internet each day. Secondly, display advertising with them is a whole lot more attractive now – particularly in the US. Thirdly, and possibly most importantly, this marks a significant step in the ongoing content wars – watch out Yahoo [see: Could Content Farms Put ‘Genuine’ Experts Out to Pasture?].
More Content, More Pages, More Revenue
The more content you produce, the greater the number of potential visits you can hope to attract. More visits mean adverts will get seen by a larger audience. Finally, even with a fairly poor Click through Rate, views will lead to clicks and ultimately income – particularly when you’re dealing with such huge volumes of traffic. With the Huffington Post receiving a reported 26 million unique visitors each month, there is some serious scope for advertising income.
This will probably come as a bit of a kick in the teeth for other blogs within the AOL family – not least TechCrunch and Engadget. Especially as the arrangement places Arianna Huffington in editorial control over all content produced within the company. It’s already had a backlash from TechCrunch staffers, who claim to have been left out of the original internal memo and derisorily welcomed their new ‘overlord’.
Increasing Reach & Visibility in US
Tim Armstrong suggests that with the Huffington Post and all other properties that they will now receive 117 million unique visitors per month in the US. That’s a lot of people seeing a lot of adverts.
Now I’m not here to pass judgement on the quality of content produced by AOL. But with a target to produce 55,000 each month, the emphasis certainly appears to be on quantity. And why not?
Content works. Whether it’s used for SEO or making money through affiliate or display advertisements, people use content marketing and they are getting decent results – whatever the scale. AOL have used the same principle as thousands of people do each day on HubPages or Squidoo, but are simply rolling it out on a huge scale.
Will this work? Again, that would simply be conjecture. It does appear to strengthen the American side of their brand significantly, however in terms of global impact, this could be quite limiting. Their past investments haven’t always been showered in glory either (Time Warner and Bebo being two good examples), but this has a better feel to it – particularly due to the new focus of the company.
Rifts amongst other blogs within their network could become even more problematic and Arianna could have her work cut out to control those factions. $315 million seems a decent enough price though, especially when considering the circulation of the site.
However, it does appear that they’re giving substantial backing to a near-guaranteed winner, a huge odds-on favourite; this would make failure unimaginable and hugely embarrassing. Without using any specific examples, it is akin to putting your mortgage on a football team that is 4 – 0 up at half time. 99 times out of 100 they’ll see the game out and you will get a huge return, however there is always the chance that it could backfire spectacularly.
Anyway, this is certainly something interesting to watch for the future, particularly if other companies with a shifting focus – such as Yahoo – respond. The worlds of search, SEO, blogging and content production appear to cross over increasingly and this buyout appears to be further evidence of that.