It may be too early to label Arianna Huffington as a successful entrepreneur, but she certainly has made a name for herself in the online media space. Today comes confirmation that The Huffington Post has secured an additional $25 million in venture capital with an assumed company value of about $100 million. Kara Swisher of BoomTown has the details.
With the money comes grand ambition, something Huffington is no stranger to. The company apparently wants to become the news destination of choice for online readers — the Internet’s newspaper, as the site proudly proclaims.
To put this ambition and valuation into perspective, the entire New York Times company generates north of $2 billion in revenues and produced over $200 million of net income in 2007. As of this writing, their stock is worth about $1 billion. Even with the declining fortunes of traditional newspapering, one wonders whether the Huffington Post truly has 10 percent of the Gray Lady’s value, given the newcomer’s lack of track record and significant revenues, let alone profits.
Put simply, the future is unknown for all media. Today, things look bleak for newspapers and optimistic for online ventures. But none of this is yet to be proven. Indeed, the Huffington Post reportedly continues to lose money. With the future of Internet advertising uncertain, Huffington and her team will need to consider how they generate profits in the future.
Moreover, to be successful over the long-term as a news destination of choice, the Huffington Post must decide whether to shed its pointedly partisan approach or to embrace it in the spirit of old-fashioned tabloid journalism. One could argue that with the success of Fox News and the faint pulse achieved this year by MSNBC that the American public is ready for a return to slanted news, no matter what the professional media critics and academics may prefer.
That’s my analysis. What’s yours?