It Seemed Like A Good Idea At The Time
link AOL INSIDER: Here Are 12 Reasons Why The AOL-Huffington Post Merger Is Going Down In Flames AOL.
Future business and culture students will be dissecting this for years. In the annals of business combinations, this isn’t exactly merging chocolate with peanut butter. As we have commented earlier, http://asiftimes.com/2011/04/12/i-thought-we-were-friends/ the idea that AOL had to hitch their name brand wagon, albeit a fading one, to that of a cult graffiti blog was ill conceived at best and epic in stupidity at worst. As this article seems to show, the only ones who couldn’t see this disaster coming was the guy running AOL, CEO Tim Armstrong.
Absent a bailout from government, this exercise will be a clinical demonstration of the mechanics of capitalism. Someone comes up with a ‘brilliant’ idea, spends money to forward it and then, when it turns out to have no basis in business sense at all, collapses, or will collapse and everyone loses money. That’s the way it is. Of course, someone’s going to make some money out of this; someone always does. There will be two conspicuous losers. Obviously, the investors in the failed enterprise lose and secondly, the architect of the fiasco, Armstrong, who will likely have trouble convincing people that he can run a lemonade stand in the future. Even now, his old business school is scrambling to take down any pictures and evidence of his attendance there and working on a public denial.
Assuming there was a business model to be acquired beyond the siren call of Arianna Huffington’s annoying personality, the spending of over $300 million dollars of other people’s money must have accomplished something. Turns out the simple answer is NOT. Upon closer inspection, the juvenile and crass scratchings of the Post scribers were not just part of the package, they WERE the package. Having a byline on the Post was the equivalent of flashing your breasts during Mardi Gras in New Orleans. Discovering that the contributors to the Post had as much contempt and hatred for their fellow staffers as for sane people must have been a jolt however. OH NO!! Maybe Armstrong made the deal after the 4th martini during a 5 martini lunch when anything would have sounded reasonable. I’m sure he now feels like the guy in the Vegas commercials who wakes up in the morning with tattoos and nipple rings on his body.
Ironically, Arianna, despite her anti-capitalist and anti-American sensibilities has realized the quintessential American dream. You can’t make this up.