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How the Huffington Post became a $315 mn killer app

How the Huffington Post became a $315 mn killer app

By David Carr and Jeremy W. Peters, The New York Times | Updated: 8 June 2012 17:04 IST

Highlights

The Huffington Post broke into public consciousness based on its namesake and Arianna Huffington’s A-list Rolodex, but it never would have merited a $315 million payday if those gilded elements had not been married to sophisticated technology and carefu

The Huffington Post broke into public consciousness based on its namesake and Arianna Huffington's A-list Rolodex, but it never would have merited a $315 million payday if those gilded elements had not been married to sophisticated technology and careful brand management.

That's where Kenneth Lerer, its lesser known partner, came into play.

The friendship between Ms. Huffington and Mr. Lerer, a former AOL executive, almost did not happen. He said his first impulse was to say no when his friend Tom Freston, then the head of Viacom, suggested the two meet for dinner back in 2003. Mr. Lerer saw in Ms. Huffington everything he was not: an outsize public figure.

"I didn't think I was going to like her," Mr. Lerer recalled in an interview on Monday. "She's a big personality. I didn't know her. I wouldn't say I'm a shy guy, but I stick to myself."

But meet they did, at an Italian restaurant on the Upper East Side of Manhattan. His perception of Ms. Huffington, whom he knew only from her days as a Republican pundit in the 1990s, quickly changed. "I said 'She's terrific.' You know how you just hit it off with people instantly?"

The unlikely pair grew to know each other better over the next year and hatched an idea: a liberal version of the Drudge Report, where people disaffected with the Bush administration could gather.

"He knew how primary this technology was going to be," Ms. Huffington said, "and was a consistent advocate for making sure that we were getting our work and our site out there in front of people."

Few, including Mr. Lerer, ever thought it could be a legitimate business. Blogging, after all, was done by loners in their basement.

"A lot of people I know tapped me on the head and said: 'This is cute. What a nice cute idea,' " Mr. Lerer recalled. "So for the first year or two we didn't get a lot of phone calls saying, 'Wow!' We got a lot of phone calls saying, 'What the hell are you doing?' " He added, "I didn't think it was going to be profitable."

Ms. Huffington, who wrote a best seller titled "On Becoming Fearless," had no such doubts.

"I decided early on that the Internet, that new technology, was going to provide a new way of connecting people," she said, "and although I had no idea how big it would get, but I knew we were doing something that would work because the old media ways were not meeting people's needs."

On Monday, they surprised the skeptics, announcing that they had reached a deal to sell The Huffington Post to AOL for $315 million.

The Huffington Post turned out not to be just a single thing. Like so many successful Web enterprises it was a combination of features that together became a killer app. There was low-cost content, some of it from prominent contributors, combined with an unapologetically liberal bent; there was a relatively sophisticated system of aggregating content from other news sources; there was a way to build a community of comment around it.

And the site was always at the forefront of search optimization -- headlining content in irresistible ways and often linking to salacious or marginal content in hot pursuit of traffic. (Much of the early traction in breaking through the clutter and getting noticed came from Jonah Peretti, who left early on to work at BuzzFeed. Mr. Peretti brought a sophisticated understanding of search, of how to find precisely what people were looking for at any given moment.)

The Huffington Post soon blossomed into a tribe with a roster of mostly unpaid bloggers that grew from 500 to 9,000 over the course of five years, all creating a site that manufactured much of its own content and liberally borrowed much of the rest. As the site matured, Ms. Huffington pushed resources into more original content and bigger names, but The Huffington Post has above all been a triumph of packaging and sensibility.

The same thing that made Ms. Huffington a little daunting in person -- relentlessness, endless networking and promoting -- were remarkably adaptive to Web endeavors. Her professional marriage to Mr. Lerer was a case of East Coast meets West. Mr. Lerer, the consummate East Coast executive working in the background, ends up in common cause with a creature of Los Angeles, whose career as liberal and conservative activist, political spouse and candidate left her with a fully weaponized list of connections. Ms. Huffington's access to celebrities and willingness to press them into service as bloggers -- Walter Cronkite was among the first bloggers, as was Ellen DeGeneres -- served the site well.

Nora Ephron became one of the marquee bloggers whom Ms. Huffington persuaded to write for the fledgling Web site as a way to draw in readers. Ms. Ephron said she agreed to take the job because of Ms. Huffington's relentless pursuit. "The thing she does, which is if you say anything to Arianna, it does not matter what, and it doesn't matter if you find yourself within three feet of her and any words come out of your mouth, she will suggest that you turn it into a blog. That's what she does," Ms. Ephron said. Ms. Ephron first met Ms. Huffington as Ms. Ephron was casting her 1998 film, "You've Got Mail" -- which ironically at the time was AOL's catchphrase.

Andrew Breitbart, now the owner of a series of conservative sites, including Big Government and Breitbart.com, worked at the Drudge Report and agreed to help Ms. Huffington, who had a personal blog, build something more substantial. He knew Ms. Huffington from her days as a conservative; he had worked as a researcher for her.

"I told her at the time that people would be dying to know what her group of A-list friends were thinking," he said. "And she had a bravado and a point of view that people were just drawn to. It is a battle out there to get noticed -- there is really no such thing as selling out -- and no one was better prepared than Arianna to promote what she is doing. I learned many of my best moves from watching her."

Mr. Breitbart said that it fell to Mr. Lerer to build a business around it, one that produced a profit in 2010, and even more surprising, the sale to AOL. In the history of modern media, there are few examples of a media brand built out in five years with less than $50 million in costs. "In Kenny," Mr. Breitbart said, "you had this P.R. guru who knew how to create and sell a brand. What really started out as a bulletin board for the left of center became something much larger, something that transcended that perception and branched out into other content."

In a phone interview, Ms. Huffington said that after the first year, when The Huffington Post began to branch out into areas beyond politics and into media and entertainment, she knew that the site could go large scale. "I knew it was going to work," she said.

She said that Mr. Lerer, who is no longer involved in day-to-day operations, concentrating instead on Lerer Media Ventures, which he owns with his son, provided not only business rigor and brand savvy but was a consistent advocate for building a technology company that was also a media company.

Mr. Freston said Ms. Huffington and Mr. Lerer's opposite personalities -- she gregarious, effusive and innately social; he reserved, private and cerebral -- complemented each other.

"They're a perfect match. In a way you couldn't get a better front man than Arianna. Besides being into politics, she's externally driven, she's very visible and has become even more visible. And Kenny, he was a very, very smart, adept adviser.

"He's a low-key guy and a real sage," Mr. Freston said. "Kenny in his low-key way and Arianna in her out-front way moved this thing from level to level to level seamlessly."

Given the amount of momentum the site currently has -- over 30 million people a month visit, according to Quantcast -- some people, including competitors, were surprised that the team chose to sell.

"Huffington Post was fueled by liberal rage against George Bush, Fox News and the right-wing media-political complex," said Nick Denton, who owns Gawker Media. "They could have become the liberal Fox News. They were better placed to take that niche than MSNBC. But the only way to overcome advertiser objections is to become very, very big. And they lost their nerve."

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