This morning AOL announced it is acquiring Huffington Post for 315 million dollars. Here are 4 quotes that explain why this is a good thing for AOL.
AOL CEO Tim Armstrong:
“There are a number of areas where AOL and The Huffington Post’s content overlap and, based on our analysis, AOL lost roughly $20 million in those areas in 2010.” from Business Insider.
AOL CFO Arnold Minson: “The Huffington Post has had rapid growth since its birth. In 2011, we expect it will do over $50 million in revenue and we believe it will be at a $100 million revenue run- rate in the next 12 months and operating in the 30% margin range.” from Barrons.
“As part of the transaction, Arianna Huffington, The Huffington Post’s co-founder and editor-in-chief, will be named president and editor-in-chief of The Huffington Post Media Group, which will include all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and more” From Kara Swisher’s blog.
Arianna says “I want to stay forever, I want this to be my last act” From Kara Swisher’s blog
So – Here’s why this works, in a nutshell: AOL runs a business that has overlap with the business that Arianna Huffington runs. Arianna ran her business, in 2010, with a $10m profit. AOL’s overlapping business produced a $20m loss. The new business unit will have Arianna’s name, she will be the president, and she wants to stay… “forever.”
Regardless of the traffic numbers, which are considerable, this is a huge win for AOL because they get a person who knows how to make money. Given AOL’s master plan, this is exactly the business they want to make money in.
What do you think?
Ive been watching Audi online more and more lately. I went to a swanky VIP/RSVP thing at my local Audi dealership where they unveiled the fantastic new A8. It has a cockpit that is remarkable in every regard. My 2001 S4 seems as retro as a 57 Chevy by comparison. I’m also kind of impressed by Audi’s push into the Superbowl. The Kenny G doing Prison Riot Suppression video is the sort of quirky original thing that fascinates me. I have a search for @audi - on my Tweetdeck.
I was surprised this morning to see a Lexus advertisement on top of my @audi search in Tweetdeck. There’s nothing new about advertising online using a your competition’s words, say as keywords and titles to SEO some people into your site instead of theirs. Fans Flipping Out on Bravo will remember Jeff Lewis getting VERY angry at a former business partner, Ryan Brown, for using some keywords a few years ago, and perhaps adwords to help his business. (season 3, of course)
So – whats new here? Lexus has sponsored @audi on Twitter. Anyone who has a stored search for @Audi in Tweetdeck and/or Hootsuite will see an advertisement for Lexus at the top of their stream. Here’s what that looks like in Tweetdeck:
Certainly a delightfully creative way to advertise to your target audience. Lexus – sombody there is Brilliant.
I think this interesting because LEXUS – sees Audi as serious competition for eyes, and buyers. Lexus is so concerned about people following @Audi, they are paying Twitter for those responses. Audi isn’t the only competition for Lexus. If I am in the market for a Lexus, I might look at other makes. It occured to me that Lexus might be sponsoring other car brands as well. Guess who else Lexus worries about… enough to pay for sponsored responses? BMW, Cadillac and Infiniti. Lexus is NOT following Lincoln, Jaguar, Acura, Hyundai or Equus through. (yet?)
What do you think? Is this a new trend?
It is also interesting because other companies are sure to follow. Lexus is a leader here, and Twitter can surely use this for every other large company that wants to pro-actively protect their own brand, on Twitter, Tweetdeck, Hootsuite, etc…
Vivek Wadhwa sparked a bit of a firestorm on the first of January 2011 with his article “Why we Desperately need a (new and better) Google.” Vivek’s first point was that Google’s search result-sets are overrun with content farms of junk data. “Google has become a jungle: a tropical paradise for spammers and marketers.” He also pointed out that alternative search engine Blekko does things differently. In reading Vivek’s blog, I realised that the Search Wars… may produce no victory – just casualties.
I blame Marcus Frind – founder of Plenty-of-Fish and I also blame INC Magazine. The cover of Inc Magazine on January1, 2009 was about how Markus Frind keeps money rolling in. Marcus keeps the money rolling in by producing content that his customers want. (He also blogs about it, and has since 2006 - with his wordpress theme essentially unchanged as far as I can tell.) Marcus Frind figured out what content the most people wanted, and monetized it, initially with Google’s Adwords/Adsense toolset. Other people realized that if Marcus can make millions off of Sex, then other topics could be less lucrative, but still valuable. When people realized it, then companies realized it. http://www.associatedcontent.com/ is Yahoo’s “official library.”Yahoo, most famous lately for selling Yahoo HotJobs to Monster, and selling Yahoo Personals to Match.com – BOUGHT Associated Content in 2010 for $100 million dollars. What does Associated do for Yahoo? A quote from AdAge: “Associated manages a network of freelancers, but has also built underlying technology that predicts what kinds of content consumers want, as well as surfacing that content through natural search on engines such as Google, Yahoo and Microsoft’s Bing so the library makes money over time”
Translation: Associated makes money by building content that stuffs Google and other search engines. They are only ONE company that does this. Ok. I admit it. Marcus Friend and INC magazine aren’t really to blame. There is nobody to blame. People search. Searches produce data. Data is valuable and has a price. Search engine responses have a price. Building content to respond to those searches has value – whether it is for an SEO consultant, a “content farm” a media company, or any other company.
Having a price for the value of the response of Google searches, and a documented way, a well-understood way, a reproducable way to monitize the value of that response has become a problem for Google’s core business model; and it presents an Opportunity for Microsoft’s Bing.
Wired – and everyone else online – noticed the escalations in the business-war between Google and Bing. Wired’s article is titled: Google Catches Bing Copying; Microsoft says ;So What?’ but they really missed the point. The point is not copying, or customer data, or even money. The point of this war is risk. By fighting the war, both sides incur risk.
Farsight 2011: Beyond the search box. “The future of Search” was recently held.
Just before it was held, Danny Sullivan broke some very interesting – somewhat inflamatory information. Google trapped Microsoft/Bing copying Google Results. Microsoft admitted to using opt-in data. Google obviously has been in the browser tool bar business for quite some time, and they also use opt-in data. Microsoft and Google both make billions from advertising, from operating systems, from browsers, from devices, and ultimately from advertisers, based on hexa-giga-peta-bytes of “opt-in” customer data.
There is endless value in the data that comes from browsers. Microsoft knows it. Google knows it. Everybody knows it. Microsoft is using the data to improve the tool that its customers are using. Google uses that value to sell AdWords. Everybody makes money counted in the Billions.
This argument between Google and Microsoft is Risky for either or both.
Here are two possible outcomes that would benefit Microsoft.
1) If people conclude from the resulting press that Google and Bing are not that different…
and if businesses conclude that neither has a competitive advantage, that is a huge win for Microsoft’s Bing.
2)If people are interested in having tools that learn from their input and misspelllllings, they might use Bing more often.
Considering that Bing (as of 1/14/11) has 12% market share vs 66% for Google, any win for Microsoft’s Bing could be extremely significant.
HOWEVER, If people believe that Microsoft is stealing, that might benefit Google. If people believe that Google is emphasizing this issue to reduce the problem of junk-filled content farms which you address above as being able to differentiate “content produced by regular people and large-scale junk produced by the spammers” that is a problem for Google.
It is most risky, however, for both. I think this spat has the potential to further help people understand the value of the data they provide, the button-bars they install, the software, hardware and search engines they use, the sites they visit, the information that THEY willingly provide.
That makes this war very risky to both Microsoft AND Google.
Search Wars may not have a winner, only casualties.
What do you think?