The technology side of AOL's Huffington Post buy

Why there's a legitimate, developer-grounded reason for AOL spending $315 million on The Huffington Post--and why AOL should make absolutely certain not to screw it up.

The Huffington Post's Arianna Huffington
The Huffington Post's Arianna Huffington CBS/The Early Show

The expected in-depth analysis of Sunday's Super Bowl advertisements was almost completely wiped from the media punditry's agenda when, at midnight on Monday, AOL announced its deal to acquire The Huffington Post for $315 million .

It's "the equivalent of a fourth-quarter Hail Mary pass," Ken Auletta wrote in The New Yorker. Or "a slow-motion train wreck and will end in disaster," according to Dan Lyons in The Daily Beast.

Even those who were more bullish on the deal expressed surprise and a bit of skepticism at the idea of AOL CEO Tim Armstrong, who hasn't yet been able to produce the results that his much-touted company turnaround has projected, gambling so much on The Huffington Post--which has been able to turn a profit, but a slim one, on heavy amounts of link aggregation, slideshows, ads running alongside posts from unpaid bloggers, and sensationalist headlines.

Yes, AOL now has a colorful, eye-grabbing editorial czarina in the form of Arianna Huffington, a sort of 21st-century update to the newspaper barons of yore. Yes, it also now has a massive news property in its portfolio of content sites that far surpasses any of the popular-but-still-niche blog brands that make up much of its editorial portfolio. Yes, it's an incredibly insidery arrangement considering that Huffington's co-founder, Kenneth Lerer, was an executive at AOL back in its days as AOL Time Warner and remains closely affiliated with other former AOL consiglieri like ex-CEO Robert Pittman, in whose Pilot Group investment firm he is a member. Yes, Armstrong and AOL could completely blow this deal.

But in buying The Huffington Post, AOL is also acquiring one of the biggest and most active community of news bloggers and commenters on the Web--and the technology that let it get that big.

Considering that the deal will see the departure of many Huffington Post executives, including CEO Eric Hippeau, the spotlight has instead been on co-founders Huffington and Lerer. The third Huffington Post co-founder, technologist Jonah Peretti, has been almost completely absent from Monday's headlines about the company's sale--perhaps because he left full-time work at The Huffington Post relatively early in its history in order to found BuzzFeed, an algorithmic trend-tracking start-up that initially shared office space with Huffington's news site.

"To overlook the role of Jonah Peretti in the success of The Huffington Post is to not understand how The Huffington Post became what it is," said Rachel Sklar, who worked as an editor at the company from 2006 through 2008. "Their understanding of search, of what people search for, how to hit the search sweet spot as well as serendipity--Huffington Post did search and serendipity both very, very well. They arranged to be right in front of people when they were looking, and they arranged to be irresistible to people when they weren't looking."

It's this ability to become chatter-worthy and prominent, both among readers and search engine results, that Peretti--who did not reply to a request for comment on Monday--brought to the table at The Huffington Post. Previously, the MIT Media Lab graduate had made a name for himself as someone with a unique grasp on how to create a sensation--starting in 2001, when he wound up on the national TV news circuit within weeks of getting into an e-mailed spat with sneaker brand Nike over the company's refusal to make him a pair of custom sneakers that read "SWEATSHOP" on the sides.

"Peretti, as a founder, always brought technology innovation to the vision and scale to the execution," said media pundit and author Jeff Jarvis, who also delved into the tech-oriented side of the AOL-Huffington Post deal on his blog, BuzzMachine. "He took existing blog tools and made them ready for both prime time and celebrities. Huffington Post understood the value of metrics sooner than other media companies."

Of course, The Huffington Post's tech mastermind is no longer at the company, but its ongoing ability to deftly balance content, community, and readership was without a doubt enviable to AOL, which has tried and thus far not succeeded in being able to generate a broad base of connected, AOL-loyal readers other than using its portal-like home page as a bit of a crutch. It launched freelancer clearinghouse Seed.com a little over a year ago, about the same time that AOL spun off from Time Warner for good and Armstrong's war cries of content-above-all became the company's chief mantra. Seed is still around, but is hardly on a par with rival content-generator Demand Media, which went public last month.

The Huffington Post may be exactly what AOL needs to do what Seed couldn't. Its search-engine optimization is excellent. Readers are so active that stories routinely pull in thousands of comments, with quality assisted by a system of moderation and user badges that The Huffington Post schemed up in-house. The Huffington Post also enjoys a close relationship with Facebook, piloting some of the social-networking site's news-sharing initiatives before they were available to other publishers. And--like it or not--there are many, many people out there who see The Huffington Post as such a choice platform for exposure that they're willing to blog there for free.

Critics point out the cheap advertising rates on The Huffington Post, the proliferation of relatively tawdry content ("WATCH: Christina Aguilera Totally Messes Up National Anthem," "PHOTOS: Pregnant Selma Blair In A Bikini"), and its reliance on Huffington's outsize personality for branding. But it must have been doing something right, considering the utterly low chance that it had for survival in the first place. The Huffington Post launched in 2005 with little more than money, celebrity connections, and enthusiasm fueled by liberal soreness over the results of the 2004 presidential election. By most accounts, this is not a recipe for any kind of dot-com success. But it beat the odds, and then beat the odds again when, in contrast to pundit predictions, its traffic failed to tank after the 2008 election .

The answer to all this? Savvy technology. That's what AOL's really paying $315 million for, and that's what it has to be particularly careful not to screw up altogether.

 

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