With AOL getting snapped up by telco giant Verizon Communications for $4.4 billion, the Internet-media company is reportedly looking to jettison the Huffington Post — and potentially other assets that don’t align with Verizon’s corporate strategy. But AOL denies it has any plans to sell any of its content units.
AOL has been in discussions to spin off Huffington Post, the news-aggregation and blog site it acquired in 2011 for $315 million, according to a Re/code report citing anonymous sources. HuffPo has been valued at more than $1 billion; the negotiations have been “most serious” with German media conglom Axel Springer, per the report.
Asked for comment, AOL issued a statement claiming it is keeping all of its content divisions.
“AOL owns a portfolio of premium, global content brands including the Huffington Post, TechCrunch and Endgadget, among others, and all of them will continue to be part of our business as we go forward,” AOL rep Caroline Campbell said in an emailed statement.
However, industry analysts say, it seems likely that Verizon would want to get rid of certain AOL properties that would conflict with the activities of the U.S.’ largest wireless carrier.
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“Can you really see Verizon being the publisher of the Huffington Post?” Gartner principal research analyst Bill Menezes said. “I don’t think Verizon wants to be a digital publisher. They want to be a conduit – they want to create value that takes customers away from AT&T or Comcast.”
Huffington Post’s coverage on such issues as network neutrality and wireless data caps run counter to Verizon’s positions, Menezes said, along with other sites like TechCrunch and Engadget. Those news sites publish “stuff that is not necessarily the point of view Verizon wants to put across.”
Verizon last fall launched its own tech-news site, Sugarstring.com, which forbade topics such as net neutrality and government surveillance. It shut it down in December, calling the site a “pilot project.”
Others also don’t see Verizon hanging on to certain non-strategic content brands. “Verizon is clearly not a media company, so there are no new scale advantages by combining AOL content with existing properties,” VideoNuze’s Will Richmond wrote in a blog post. “The more likely result is a sale of AOL’s content portfolio to a large media company that can gain further scale.” And that, he suggested, would help the telco recoup some of its $4.4 billion investment in AOL.
AOL CEO Tim Armstrong, in a memo to employees, wrote that the Verizon deal “will not change our strategy – it will expand it greatly.”
“The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features,” Armstrong wrote.