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Verizon could spin off The Huffington Post for $1 billion after acquiring AOL

arianna huffington careers interview business insider
arianna huffington careers interview business insider

(William Wei, Business Insider) Arianna Huffington, cofounder and editor-in-chief of The Huffington Post.

The Huffington Post could be spun off for as much as $1 billion following Verizon's $4.4 billion acquisition of AOL.

AOL acquired The Huffington Post for $315 million in 2011. Now sources tell Re/code's Kara Swisher that AOL has been in talks with the German media company Axel Springer, as well as numerous private-equity firms, regarding a sale or joint venture of its biggest content property.

Sources told Swisher that AOL's other properties — such as TechCrunch and Engadget — were not included in these talks.

Tim Armstrong, AOL CEO (who will stay on to run the AOL business, which will operate as a division of Verizon, after the deal closes) didn't address the possibility of a spinoff directly when speaking to Re/code's Peter Kafka earlier Tuesday, but he did say:

We've spoken to partners about content and scaling. Obviously we've seen a lot of interest in the content brands we have. So over the course of the summer, stay tuned.

Speaking with CNBC, Armstrong said The Huffington Post would be one of the "biggest winners" out of this deal:

Armstrong is speaking with Arianna Huffington at 4 p.m. ET on Tuesday, according to The Huffington Post's business editor, who attended a meeting held by the AOL CEO earlier Tuesday:

AOL spokeswoman Caroline Campbell provided Business Insider with this statement: "AOL owns a portfolio of premium, global content brands including The Huffington Post, TechCrunch and Engadget, among others, and all of them will continue to be part of our business as we go forward."

As Re/code points out, Verizon is buying into a business that is part content and part ad tech.

AOL has been steadily building out its ad tech stack over the past year or so. And Armstrong (clearly knowing what was about to be announced Tuesday) said last week that he believed AOL would soon become one of the top three, next to Facebook and Google, in online advertising. It's currently No. 11, according to eMarketer.

Verizon offers AOL the scale it needs to do that. AOL offers Verizon a ready-made ad tech platform, plus content to push through the mobile pipes.

AOL referred to that in an email to the media on Tuesday. The note, on why the deal made sense, didn't refer to content brands specifically but instead pointed to where AOL "leads" in video, mobile, social, video, and programmatic advertising.

AOL reported a 7.2% lift in revenue to $625.1 million in its first quarter. Net income fell to $7 million in the three months to March 31, from $9.3 million in the year-ago quarter.

NOW WATCH: Tim Armstrong Lays Out His Plan For AOL's Future

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