Did AOL CEO Tim Armstrong Just Buy His Successor Arianna Huffington?
This morning I’ve read some fairly weak commentary about AOL’s (NYSE:AOL) blockbuster M&A with Huffington Post. A lot of it has undercurrents of jealousy or politics. But those simple minded reactions drastically miss the three main takeaways from this deal:
1) Arianna Huffington is now the most powerful woman in media history;
2) AOL is making a bold move to reinvent itself for the upcoming Golden Era in media; and,
3) Arianna is now only one move away from becoming CEO of AOL.
Ironically, AOL CEO Tim Armstrong has just made what could be the smartest move for his struggling internet company and the worst move for his career. Yes, Tim Armstrong may have just bought his successor.
Do you really think Armstrong is buying Huffington Post because they “share a vision”? Uh, I don’t think so. AOL is buying Huffington Post because Arianna has the vision and Armstrong wants to bring his company along for what has been an incredibly successful ride.
Whether you love or hate Huffington Post, you cannot deny it is arguably the most successful new media news company. (So please spare me the ad hominem attacks on Huffington — that’s not what I’m talking about.) While The New York Times (NYSE:NYT) and News Corp. (NASDAQ:NWSA) wobble around trying to figure out how to monetize their newspapers/websites, Huffington Post has built a $315 million competitor which understands how to monetize news consumption on the web. Not bad for a 2005 startup considering the other two companies control meaningful bastions of American culture.
With that said, it’s a strategic no-brainer to go one step further and image Arianna taking over AOL because:
- She obviously knows how to make money.
- She has proven the ability to oversee a media company covering all the major content verticals.
- She has all the qualities of a top tier CEO (interfaces with the public, strikes deals, executes on high level visions and strategies, etc.).
- She understands global media consumption habits.
- She would catalyze a huge revitalization of AOL’s company and stock.
- And much more.
So, although some people will inevitable travel down the wrong branch of the logic tree and wonder why Huffington has married her baby with an admittedly clumsy bureaucratic corporation long past its peak, I believe Huffington has much bigger plans and simply sees AOL as distribution vessel of better resources and cash to get her to the endgame of creating a global media company reflecting her vision for where media is headed this millennium (see the interesting video to the left where Huffington and Armstrong explain why they are merging).
Watch your back, Tim.
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