It wasn't exactly love at first sight between the Huffington Post and AOL but, with the latter now climbing in bed with the former for $315 million, it looks like no one was playing too hard to get either.
HuffPo CEO Arianna Huffington and AOL CEO Tim Armstrong “knew each other” when their paths crossed at New York’s Plaza hotel last November, says Kenneth Lerer, HuffPo's co-founder and chairman until he stepped down today. “It’s like they’d been at the same parties before but never danced together. Now they just hit it off, and started to talk about their visions.”
Read also: Game-Changer: AOL Has Bought Huffington Post
The AOL and HuffPo deal seems to have blown in out of nowhere, like a whirlwind.
Read also: Calling Netflix or HuffPo; After 2010, Hollywood Needs a Game-Changer
But it wasn't simply because Huffington and Armstrong happened to attend the same NYC media conference between Nov. 9-10 last year. The transaction is the culmination of a build-and-exit strategy that the L.A.-based Huffington and her investors began pursuing from the launch of HuffPo nearly six years ago.
“It was our hope that we could make a difference and create a terrific website,” Lerer wrote to his network of personal contacts this morning about the transaction. “[T]he site has become a potent brand with a proven track record and is growing very rapidly.”
In an interview with TheWrap, he added, “Now [HuffPo] can build even more aggressively than on our own.”
The light-speed by which pundits are declaring their mixed opinion on the deal is matched only by the blinding ascent of HuffPo’s value over the last three years -- tripling to more than $300 million from $100 million at the end of 2008.
And just that suddenly, Huffington and other shareholders -- including three of the digital media’s savviest investors -- are walking away with one of the industry’s biggest scores in years.
The HuffPo brain trust has been intently war-gaming its strategy in the last year or so, as the site’s seven-year anniversary in 2012, a typical timeline for private investors to look to cash out, crept closer.
In the months leading up to Sunday's announcement, two other suitors had helped sharpen HuffPo's focus on their end game.
However, neither Yahoo -- beset by serious management and business issues -- nor NBC Universal -- subject itself at the time of a takeover bid from Comcast -- ever even made a formal offer.
Still, if anyone had a doubt that the plan was working, the interest indicated that HuffPo would inevitably cash out at a hefty price. The operating trends, with rising advertising and profits, were certainly pointing in that direction.
But the challenge was in cultivating even stronger growth and fine-tuning the exit. “The goal was to continue to build the brand aggressively,” says Lerer.
