Tuesday, June 21, 2011

12 Reasons Why The AOL-Huffington Post Merger Is Going Down In Flames

Here Are 12 Reasons Why The AOL-Huffington Post Merger Is Going Down In Flames
Nicholas Carlson
Business Insider
Friday, June 3, 2011

AOL bought Huffington Post for $315 million earlier this year.

So far, according to a reader, the intergration is going very badly:

Twelve reasons why the AOL – Huffington Post merger is going down in flames.

The tragedy here is that not only will the deal ruin AOL, but it will also ruin the Huffington Post.

It is the Peter Principle on a grand scale. None of AOL’s senior editors (Huffington, Roy Sekoff, and Nico Pitney) have ever managed more than a few people. Now they have hundreds and lack the experience to manage a team this big. Behind the scenes, long time Huffposters say that Jai Singh’s departure has eliminated the key adult in the room. Now they need to grow HuffPost and save AOL – not possible.

Dissension in edit. The editorial team is miserable and views Arianna as unpredictable and her leadership unsteady. Several editors are racing to close book deals to be write the “Devil Wears Prada” of the digital age. Others are aggressively pitching unflattering profiles to New York Magazine, Vanity Fair, and the LA Times. The lack of maturity and loyalty among editors is stunning – even those close to her are extremely negative behind her back – which is surprising because she has done a great job taking care of her people.

Hasty launches. New site launches, like AOL Healthy Living, are little more than Huffington Post channels and very poor quality The real URL is www.huffingtonpost.com/aolhealthyliving - it is a joke.

Dissension in tech. CTO Paul Berry is miserable in his new role and refuses to create an org chart. Most of the tech team is miserable that they have to do things that large, complicated, advertising based sites require. They would prefer to focus on huffingtonpost.com.

No product function. Huffington Post effectively eliminated AOL’s product function – design and development of the sites is handled by editors via email list serves, creating enormous amounts of churn.

Unclear lines of authority. Editors are turning down sponsorships – refusing to allow McDonald’s or K-Mart sponsor AOL’s fashion week coverage.

Traffic is down. The integration is likely destroying the Huffington Post. The sales demands and content over-reach are destroying huffpost’s focus while the org is trapped trying to save AOL when the huffpost team should be focused on building huffpost. Traffic on huffpost is up – but only due to the redirects from aol sites…. Net net, aol plus huff post traffic is in decline and the situation is not improving.

Imperial over-reach. AOL will eliminate Popeater and Parentdish this month and roll them into the Huffington Post. Arianna’s people are plotting to eliminate all non huffingtonpost.com websites and redirect all traffic to the huffingtonpost.com. No one thinks consolidating to huffingtonpost.com is a good idea from a consumer or an advertiser perspective, but no one will stop Arianna.

Fear and paranoia. Large parts of the org recognize the strategy is bad for the business but everyone is afraid to speak out. Arianna is rumored to have created an enemies list across the company and has directed her loyalists to collect dossiers on other managers across the company and report back on conversations. Her list includes several key business, sales, technology, and marketing executives she wants to eliminate and replace with her people. Anyone who disagrees, even if backed by data and clear rationale’s – goes on the enemies list. Facts don’t matter.

Nepotism. Huffington is also quietly positioning several of her senior folks, in particular, Chris Davis, to take over the business, marketing, and distribution functions of the Huffington Post Media Group, do away with the business edit split, and eliminate COO John Brod. Davis, like the rest of the team, has never managed a business of this size or complexity.

Lack of exec buy in. Several senior execs are actively positioning themselves and their businesses for the eventual private equity takeover – few have confidence this will work.

Waiting for Tim. CEO Tim Armstrong remains enamored with the Huffpost team and has created a double standard – huffposters can launch poor sites, create low quality articles, and launch low quality video programming and get away with it. He believes they can do no wrong and that the integration is going fantastic.

What do AOL and HuffPo employees think of this take? Let us know below or at nicholas@businessinsider.com or 646.376.6014. We're discreet.

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