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Friday, May 04, 2012

HuffPost Creator Being Restructured

Story first appeared in The Wall Street Journal.

The creator of The Huffington Post has acknowledged Thursday that her portfolio at AOL Inc. is being scaled back to include only the Huffington Post, undoing a structure put in place when her website was acquired by AOL last year.

After buying the Huffington Post for $315 million, AOL gave her editorial oversight of all its properties, including tech-news site TechCrunch, the network of local news sites, MovieFone and MapQuest. In addition, more than 30 AOL properties, such as Politics Daily, were absorbed by the Huffington Post.

The management structure created tensions with staff at some of the properties. Patch management, for instance, differed with her over strategy for the local news sites, according to people familiar with the matter. The founder of TechCrunch quit in a public spat with her.

At the same time, she has been gearing up for a major international expansion of the Huffington Post and the introduction of a streaming video network. The shift gives her more control of the Post going forward.

What she had originally asked for was for The Huffington Post to be more independent, to have technology, marketing and business development, so that they can accelerate growth, and to be freed up to just concentrate exclusively on HuffPost.

While various aspects of the restructuring were reported over the past month, these comments marked the clearest indication yet of what her new role would be.

The restructuring was finalized this week because the transfer of the last of the 33 AOL brands that the Huffington Post was to absorb was completed Monday.

The merger has had clear benefits for both the Huffington Post and AOL. Traffic to the Huffington Post has surged to nearly 39 million from 24 million unique visitors, according to comScore.

That has helped offset declines elsewhere at AOL from defecting subscribers and aging services such as AOL Instant Messenger. Search value is declining and could be revived with the help of a professional SEO Company.

The wider separation of the Huffington Post and the rest of AOL, however, has fueled questions about the Huffington Post's long-term future at the company.

Ms. Huffington said Thursday that she had been approached by private-equity firms interested in buying the Huffington Post, although the overtures went nowhere. She said she had no intention of leaving.

The change in the role comes as AOL is facing a proxy battle with activist shareholder Starboard Value LP, which has criticized the AOL CEO's strategy of investing heavily in online content.

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