Does HuffPost have much of a future?
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Hardly a week goes by without Spotify announcing a major acquisition or hire. From almost the moment the streaming app signaled its expansion into the podcasting space, it started spending its massive war chest locking down networks (Gimlet, The Ringer), distribution tools (Anchor), and celebrities (Amy Schumer, the Obamas).
But one hire in particular recently caught me off guard. Earlier this month, Spotify announced that Lydia Polgreen had taken a job as Gimlet’s head of content. “She will oversee the entire content slate, reporting to Gimlet co-founder and managing director Alex Blumberg,” reported The Hollywood Reporter. “Her purview will include setting the creative vision for the podcast studio as it looks to expand as part of Spotify's push to grow its nonmusic audio streaming business.”
Polgreen is a widely respected journalist who started working at The New York Times in 2002 and won a George Polk Award a few years later, and in 2016 she was chosen to replace Arianna Huffington as editor-in-chief of The Huffington Post, which, along with its fellow AOL properties, had been vacuumed up by Verizon a year earlier. Her move to the liberal news site was widely applauded within the journalism industry, and there was general excitement about what The Huffington Post would look like under her leadership.
That’s what made Polgreen’s defection to Gimlet/Spotify so shocking. Shortly after the hire was announced, I tweeted, “Hard to say what's the real story here: that Spotify is getting good at sucking up top content talent, or that HuffPost is struggling to keep it.”
The tweet was tongue-in-cheek, but while I’m not privy to Polgreen’s reasoning for taking the job, I don’t think the timing was a coincidence. HuffPost and its fellow Verizon Media properties have fallen under tough times over the past year or so, and its parent company has signaled that it wants out of the media business entirely. With Polgreen’s abrupt departure (she didn’t even stick around long enough to name a successor), it’s worth asking whether HuffPost, which was originally launched as a liberal alternative to the Drudge Report, has much of a future.
To understand how HuffPost fell into its current predicament, it’s helpful to travel back in time to to 2011 when it was still called The Huffington Post and AOL acquired it for $315 million. The acquisition was one of many initiated by AOL CEO Tim Armstrong, who was under tremendous pressure to rescue a company that, at the time, made most of its money selling $30-a-month dial-up connections to senior citizens.
Armstrong’s answer to this problem was to pivot to advertising-supported digital media, and by 2011 he had already acquired TechCrunch and hyperlocal news network Patch. Then-huge websites like Mapquest and Moviefone were already in the AOL stable, and in 2005 it had acquired a network of blogs that included Engadget and Autoblog. Rounding out the digital media empire was the AOL.com portal and the company’s email platform, which still had millions of users.
By the time Armstrong bought The Huffington Post, this pivot-to-media strategy was already firmly in place, but that didn’t make the acquisition any less of a head scratcher. Not only did he pay 10 times the site’s revenue, but The Huffington Post also relied on thousands of unpaid contributors, was fairly partisan, and had been built on the brand of a mercurial founder who was known for not being the best manager. What’s more, Armstrong put Arianna in charge of all AOL media properties (anyone else remember the drama when she fired TechCrunch founder Michael Arrington?)
Despite these questionable decisions, The Huffington Post seemed to benefit from AOL’s cash and stature. It sniped top-tier journalists from legacy publications and launched dozens of new verticals and foreign bureaus. HuffPost Live, an online video streaming service it debuted in 2012, was well ahead of its time and pioneered techniques that are regularly practiced today by live shows like BuzzFeed’s AM2DM. The site’s crown jewel was the Pulitzer it won in 2012 for a 10-part series on wounded soldiers who returned from Iraq and Afghanistan.
But though the Pulitzer gave The Huffington Post plenty of bragging rights, it struggled from a business perspective. A 2016 Vanity Fair article depicted years of strife in which Arianna was gradually iced out of Armstrong’s inner circle. The Huffington Post missed its revenue projections by pretty wide margins, and HuffPost Live was a particularly large money pit (“Nobody was watching it” a source told Vanity Fair). Arianna reportedly tried to find another buyer for the eponymous site, but the ludicrous $1 billion asking price was a nonstarter.
Things seemed like they could turn the corner with Verizon’s purchase of AOL. A year later the telecom giant also acquired Yahoo, and the combined media companies -- rebranded as Oath -- suddenly had the equivalent reach of a Google or Facebook, and what’s more, Verizon executives envisioned a scenario in which Oath could leverage the demographic data from its mobile customers, thereby improving its ad targeting. Polgreen pushed forward her own aggressive initiatives, rebranding the site as HuffPost, shutting down the blog contributor network, and even rolling out a paid membership product.
But Verizon’s commitment to Oath was short-lived, and its executives seemed to regret the acquisitions from almost the moment they closed. Within a year of the Yahoo purchase, Lowell McAdam, the Verizon CEO that pushed through the merger, left the company, and his replacement, Hans Vestberg, had very little buy-in and is thought to be more skeptical of the media business.
In 2018, Tim Armstrong left as well, and a Wall Street Journal article on his departure revealed that the great data collaboration between Verizon’s telecom side and Oath never actually materialized. “Verizon and Oath executives have disagreed over what some employees within the digital ad unit see as an overly conservative approach to using wireless subscriber data to boost Oath’s advertising revenue,” the Journal reported. Armstrong’s replacement, Guru Gowrappan, appears to have very little media experience and has described himself in interviews as an “engineer through and through.”
Indeed, two months after Gowrappan took the reins, Verizon filed a $4.6 billion write-down on Oath, claiming that it “has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings.” For those working at Oath, the filing wasn’t exactly a vote of confidence.
From there, HuffPost experienced setback after setback. In early 2019, shortly after Oath changed its name to Verizon Media Group, it saw a round of layoffs that eliminated 20 people (it had already lost 39 shortly after the Verizon acquisition went through). Among those let go was Pulitzer finalist Jason Cherkis. It also closed its German edition. In October, The Financial Times reported that Verizon Media Group was shopping HuffPost around to buyers. A month later, Gowrappan claimed that Verizon wasn’t selling HuffPost, but that may be because it couldn’t drum up much acquisition interest. In December, Verizon Media announced another round of layoffs, but it’s unclear whether HuffPost was affected.
Flash forward to today: we’re currently in an election year, and off the top of my head I can’t think of any major political stories HuffPost has broken lately. “They doubled down on millennial Wokeness and became completely unreadable,” one journalist friend told me recently. “Plus most their stories come from the AP as far as I can tell.” A decade ago, people openly wondered whether The Huffington Post would outcompete older institutions like The Washington Post and New York Times, but today it’s these stalwart legacy publications that dominate online conversations with their huge scoops. Even The Daily Beast, which was once painted as a chief Huffington Post competitor, seems to break through the noise more often and land some impressive exclusives.
So is Polgreen’s exit a sign of HuffPost’s decline? It’s hard to say. But I can’t imagine a job that high profile is something you just walk away from unless there are serious problems. HuffPost has a widely recognized brand and still carries some serious clout, but we live in an era in which media companies need much more than mass reach in order to thrive. With audience loyalty playing an increasingly important role in every news outlet’s business model, the question is whether HuffPost still has the resources and journalistic firepower to earn it.
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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.
Image via Wikipedia Commons