AOL Inc. has just announced that they will soon acquire one of the most popular online blogs, The Huffington Post.
The deal has been finalized for a sum of $315 million, of which $300 million will be paid in cash.
Co-founder of The Huffington Post, Ariana Huffington will be made the President and Editor-in-chief of the new company, the Huffington Post Media Group, which will include all the content on AOL properties as well as the Huffington Post.
News of this deal has caused quite a ripple in the stock market as far as newspaper publications are concerned. Stocks of Gannett Co. rose by 46 cents or 2.8% to $7.12. The New York Times rose by 29 cents or 2.7% to $10.90 and Media General Inc. rose by 58 cents to $6.01.
This could be because it is widely expected that the deal between the Huffington Post and AOL will improve the value of leading branded digital properties, according to John Eade the Chief Executive of Argus Research.
The merger is expected to generate a user base of 117 million visitors a month in the U.S. and will reach 270 million users worldwide.
However, regular readers of The Huffington Post and a number of other online blogs have not greeted the news with as much enthusiasm as Wall Street. Readers are primarily concerned that corporate ownership will mean that the blog will no longer continue to provide unbiased, liberal information, but will instead lean towards right-wing journalism to satisfy their corporate owners.
One commenter on the post announcing the merger said “With an influx of corporate money, will the bloggers now be paid? And if they are paid, will that payment affect their ablilty to write articles that able to tell the truth as they see it, or will they only be allowed to participate on Huffington Post if their writing meets corporate guidelines on what is considered to be acceptable?”
Others have threatened to leave the site en masse on one day, even going so far as to state that loosing a few thousand dedicated readers was probably calculated into this merger decision, so the user attrition should be bigger than AOL would have anticipated.
The deal should be finalised by the end of the first quarter of the year or early in the second quarter.