What’s Really Behind The HuffPo Revolt (Hint: It’s Not About The Money)

I sent the following thoughts to Fred Allen at Forbes.com about how bloggers made The Huffington Post what it ultimately became, and profited all along the way.  For Fred Allen, Lewis DVorkin, and all of Forbes’ leaders, they are taking on the challenge of merging world-class editorial and brand reputation with the new reality that one can’t pretend to serve one’s customers best by writing all the good stuff onself.

Just realizing that the formula needs to change though is only the beginning.  It immediately leads straight to serious questions to conceptualize and implement:  now they have to figure out how to combine two different philosophies – one of proprietary branded editorial, and one of curation.

It’s a live laboratory as we get to see them take on the challenge, even as AOL and Huffington Post have a similar challenge of bringing their own two approaches together.

My comments to Fred are reprinted below; and Fred’s thoughts are here at Forbes.com.

There has been a backlash against Huffington Post in light of its acquisition last week by AOL.

People who were willing to contribute to HuffPo for free are suddenly irritated that the AOL deal creates a payoff for shareholders but not for them.  Since AOL is a publicly held corporate entity, these contributors’ expectations have changed, and now they want to get paid.

It’s a noisy revolt, but I think HuffPo’s dissident contributors are waving spatulas in the air, rather than guns.

Underlying these revisionist claims of exploitation, one thing has been clear from the get-go: The dominant motivation of the bloggers who have posted on Huffington Post has always been far more about narcissism than altruism.

The reason Arianna Huffington was able to attract such thoughtful and provocative bloggers in the first place was because her site is a promotion machine. With each new post and blogger added, Huffington’s creation became a more powerful destination. And that meant that the site was even more attractive to the next potential blogger. The choice for a new contributor was simple: Set up your own blog, and patiently hope you can build audience over a period of years, or join the club and get instant exposure. Like the AAA automobile club or AARP, the more members in the club, the greater the value became.

The benefits of joining Arianna’s legions were numerous: Posting at HuffPo offered instant reach, credentialing, and ego gratification. Make no mistake about it, these benefits were valued by contributors all along the way. (If they weren’t, then Huffington Post wouldn’t have any contributors in the first place.) In fact, these non-financial benefits have proved far more valuable to contributors than cash.

Looking back, then, it’s definitely been a win-win: Bloggers built their own value while creating value for HuffPo at the same time.  And in the AOL transaction, absolutely nothing changes that value equation retrospectively—except jealousy.

Now, on a prospective basis, the only question is whether the value received by contributors going forward will be just as great.

In terms of traffic, there’s no doubt that it will be. But the real issue is whether the HuffPo brand under AOL’s auspices will be as valuable when it comes to providing the most important of all of Huffington Post’s assets—the halo of its brand prestige. From my perspective, this remains to be seen.

And, finally, consider this: If The New York Times had acquired HuffPo, would there be a blogger revolt at all?  Absolutely not!

This highlights the greatest opportunity and the greatest risk for AOL and Arianna Huffington. If they can truly enhance the Huffington Post Media Group so that it’s an even stronger and more prestigious media destination, then their pipeline of great content will expand further, because the benefits of contributing will continue to grow. On the other hand, if the brand is diluted down to “old AOL” standards, then all will be lost.

Tim Armstrong was wise to put Arianna Huffington personally in charge of this, because the success of last week’s deal may very well hinge on her ability to promise, persuade, and deliver at a high bar. AOL will be relying on her strength of vision, her standards, and her personal brand to bolster not only the Huffington Post’s brand, but AOL’s as well.

So the real threat to Huffington Post’s contributors is not that they will be exploited; rather, it’s the potential loss of the media machine that has been promoting them for so long.

Arianna and Tim – A Media Match Made in Heaven?

Tim Armstrong, AOL’s CEO, has rebooted AOL with a talk-track of branded destinations, A-level journalism and sizzling original content; and early Monday morning, a full week before Valentine’s Day, his romantic media vision was considerably enhanced, when Arianna Huffington announced that she was selling Huffington Post to AOL for $300 million in cash and $15 million in stock.

For the record, that’s quite a premium price – 10 x Huffington Post’s $31 million in revenues.

Despite the cost, however, Armstrong is a very lucky man, and he received a wonderful gift from Huffington, whose hugely successful and much-talked-about Web site is a perfect match that helps “complete” AOL.

Indeed, the relationship between Armstrong and Huffington comes not a minute too soon for AOL, which is finally bringing on real creative assets and talent – including Arianna Huffington, herself, as chief editorial taste-maker.

To be honest, the media industry has been wondering whether Armstrong could actually pull off a deal like this. (True Confession: I’ve been among the doubters.)

And there’s good reason for the skepticism.

The problem, in large part, has been strategic. Since he assumed the CEO’s post, Armstrong has talked with clarity about his vision for an AOL made up of destination media brands, the way Time Inc. and Conde Nast have built their portfolios.  But to date, his build-out of this city on a hill has fallen short. Instead of buildings gilded with leading journalism that attracts fame and eyeballs, his properties have largely been constructed by plumbers and mechanics laying a foundation for search engine rankings.

That’s why AOL’s recently leaked master plan, “The AOL Way,” is heavily oriented toward users’ search queries.  The playbook emphasizes volume of content, page-views per post, and production cost per-piece.  And, while “The AOL Way” is punctuated by periodic reminders like “quality content at scale,” the reader of the plan is left with the distinct impression that quality is a guardrail, not a compass direction for the journey to ROI nirvana.

Indeed, without a voice or a purpose other than page-views, “The AOL Way” comes off as soulless. Instead of emphasizing audience interests, an editorial point of view, or premium differentiation, it’s a volume strategy: the plan calls for the number of stories to jump from 33,000 to 55,000 a month; with median performance to go from 1,512 page-views per article to 7,000 within the quarter; all while gross margins rocket from 35 percent to 50 percent.

This Google-ingratiating strategy, at least from my perspective, is wrong-headed and short-sighted.  It doesn’t do anything to help build a unique and long-lasting brand that is meaningful for audiences.  And, as a result, it does very little to encourage people to eagerly and voluntarily type “AOL.com” into their browser’s destination bar.  With this playbook, consumers don’t go to AOL; they merely end up there.

There’s a solid lesson here for all of us.

AOL – like everybody else in the media business – is clearly jealous of Facebook’s gravity-defying results.  But it takes time for a proper media brand to achieve such stratospheric numbers.  The great brands – The New York Times, ESPN, CNN, Wall Street Journal – have shown us that you build audience loyalty one positive interaction, one ambitious story, and one rich consumer experience at a time.  To be sure, Huffington Post has shown us that, building its audience to a reported 25 million uniques over a well-paced five years.

So, it doesn’t happen overnight, and it certainly doesn’t happen if you’re just playing for quick search engine results.

Looking forward, it will be interesting to see whether Huffington – a savvy and independent thought leader who has always leaned forward – chooses to embrace “The AOL Way.”

My sense is that she will continue to follow her well-honed consumer-focused instincts instead.  She brings a strong point of view, a decidedly human nose for news, and a variety of social strategies for distribution – not to mention her considerable star power.  And that’s a good thing for AOL.

It’s important to recognize Armstrong’s considerable achievements.  He saw that AOL’s subscription model was a non-starter; he chose areas of core content concentration for AOL; and, unlike Yahoo!, for example, he pared AOL’s portfolio quite dramatically.

But the pre-Valentine’s Day courtship and consummation with Huffington will mean very little in the consumer marketplace if Armstrong doesn’t get rid of his seemingly unshakable Google obsession – and very soon.

Here’s hoping that Arianna can help nurture Tim’s AOL, and turn it into a true media destination.