AOL tries to reclaim lost glory with Huffington Post buy

The company looks to become a major Internet player again with $315M purchase of popular news site

AOL, an Internet company trying to reinvent itself, wants to reclaim some of its lost glory by purchasing The Huffington Post.

Industry analysts are split on how well this plan might work.

On Monday, AOL announced its plans plans to buy what has become the second most popular news Web site after the TechCrunch and its family of Web sites.

"This is a very gutsy move," said Rob Enderle, an analyst with the Enderle Group. "The upside could be incredible for AOL and this could turn them into the next News Corp. if it worked out."

AOL has struggled in recent years, after once being a top dog in the Internet community. In a bid to boost its digital content and drive readers to its sites, the company, which also owns Web magazine Engadget, has been buying up online media sites, including the Patch community sites, which focus on local coverage. Last fall, there was a lot of online buzz that AOL was poised to make an offer to buy ailing Web portal Yahoo.

AOL's next purchase, however, is going to be The Huffington Post. And Enderle said that just might restore a lot of AOL's lost luster.

"But this property has a lot of high-profile, active participants. Managing those egos will become someone's nightmare," added Enderle. "On the other hand, their star power is almost unmatched on the Web. This is what makes this spectacular -- either a spectacular success or a spectacular failure. But boring it will not be."

However, not everyone is as optimistic about this new pairing.

Dan Olds, an analyst with The Gabriel Consulting Group, said that while HuffPo attracts a great deal of online and even mainstream media attention, its purchase may not be enough to put AOL back in the top ranks of Internet players.

"I don't know if anything could reignite AOL," he added. "They've become the poster child for bad mergers and the old Web. They're mainly an amalgamation of sites now, rather than a cohesive whole. The Huffington Post purchase may not generate any synergy with their existing sites."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed. Her e-mail address is sgaudin@computerworld.com .

Read more about e-business in Computerworld's E-business Topic Center.

Tags business issuesAOLThe Huffington PostIT industryMergers / acquisitionsinternete-business

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Sharon Gaudin

Computerworld (US)

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