The New York Post ran a story titled:
“Verizon scrambling to unload HuffPost as losses mount”
This is no surprise; just a sad statement on a telephone company wanting to buy media outlets so it can promote itself, and get favorable stories about itself, sell the viewer data, upsell advertising, as well as shut down critics. But the real sin is that when Verizon bought AOL, which owned HuffPost, for $4.4 billion dollars, in just 2015, it killed off 100,000 free, unpaid writers and bloggers who made HuffPost their home and drove the traffic to the site, creating literally millions of pages of free online, high-quality content. I’ll come back to this in a moment.
The NY Post discusses how Verizon has been pitching potential buyers and they are all holding their noses.
“Verizon has pitched the property to prospective buyers including Thrillist-owner Group Nine Media, Rolling Stone publisher Penske Media Corp., Bustle Digital Media and J2 Global, insiders said. Those media outlets declined to comment.”
According to the NY Post, Verizon is claiming that it is losing money due to the pandemic.
“The telecom giant…has approached multiple digital-media companies during the past few months in a bid to get the property off its books as losses accelerate due to the coronavirus, according to sources close to the situation”.
“While HuffPost brings in between $45 million to $50 million a year in revenue, its annual expenses are between $60 million and $70 million, two sources said. And with advertising slammed by the pandemic, it will likely bring in $40 million this year, the sources said.”
Verizon is a telephone company and like AT&T, they kill media outlets and spend billions in the process — and we’ve written about this for decades.
Blaming this failure on the pandemic is ridiculous as people were confined to their homes and the online usage was up 50% since the year before, according to Open Vault.
No, what killed HuffPost is Verizon; its incompetence, and its failure to understand the basics.
Throw away 100,000 free, unpaid bloggers.
One day, out of the blue, I, and an estimated 100,000 other unpaid contributors to HuffPost, were told that we were no longer going to be able put up stories. And we were greeted with this message when we signed in:
And there were a lot of writers and personalities who you may have heard of, who wrote at HuffPost; some regularly; some when the urge hit them or they wanted to get a story told.
Wikipedia has a longer list. I just picked a few that I heard of.
- Arianna Huffington
- Barack Obama on politics
- Robert Reich on politics
- On February 17, 2016, Catherine, Duchess of Cambridge (Kate Middleton) guest-edited articles to bring attention to mental health issues affecting young people.
- Harry Shearer on life issues
- Deepak Chopra on integrative medicine and personal transformation
I had been writing at HuffPost since 2012, and some of my articles are still up and are still getting viewed and promoted. (I note that as one of the most vocal analysts covering Verizon, it was said that I was the reason they closed down the contributor section — to shut me up… (Yeah right.))
I put an index here: http://irregulators.org/huffpoarticles/
But simple math — if the average contributor did 1 story a month (accounting for those that did a few a week), the high number of free content stories would be 100,000 times 12 or 1.2 million free stories a year (and each story could be 2–6 pages.) Then, with the ‘ripple effect’, if each story had just 50 readers, that would be 60 million. Moreover, there are other breakouts like stories by famous people who bring 50,000–100,000 readers for 1 story. And much of this traffic would be generated by the author sending out notifications to go to HuffPost.
Multiply this by the stories that are tweeted, reddited, or quoted, and the fact that all of this content is archived and can be viewed over the next decade or linked to, etc. — It generated and is still driving traffic to the site at nominal cost.
This is on top the actual reporters and writers that worked for HuffPost.
The Second Sin: Propaganda and Monetization.
“HuffPost, AOL & Yahoo are Now Verizon’s Propaganda & Monetization Media Outlets.
In a previous article I learned that not only has Verizon lost billions on these properties — which historically happens when telcos attempt to be media moguls, but worse, no one had bothered to look behind the curtain at HuffPost with the subplot being — much of these articles are about Verizon’s partners-purchased groups and they are far from ‘news’.
“Here are four really, really, hard hitting, ground-breaking stories presented by HuffPost about Verizon, found by using the basic search term “Verizon” on their site.
1) A video “Love Calls Back”, produced by Verizon for LGBTQ Pride Month, and the partnership with “PPLAG” (funded by Verizon)
2) “Verizon Celebrates Women’s History Month” with Emmy Award winning filmmaker that founded “MAKERS”, (which is now owned by Verizon)
3) An Academy award winner’s video “Verizon Digital Divide: America’s Future”,
4) And the really exciting: “Verizon announces phone plans for kids”, by Engadget, now owned by Verizon.
Like I said; hard hitting news. I also found that Verizon Media was actively hiring a ‘HuffPost Monetization Product Manager’ to: “Collaborate with our partners in the newsroom to build a clear monetization strategy”, “drive innovative revenue campaigns”, “ensure the right metrics are being tracked”, “provide highlights into reader behavior that impact monetization”.
Here is a job offer on LinkedIn from Verizon Media for a “Project Manager, HuffPost Monetization”. (Edited).
Thus, Verizon killed HuffPost because it decided it needed a media outlet to promote Verizon and make money off of those coming to the site, and tied to advertising.
And it killed off 100,000 contributors that people actually came to the site to read.
In “The Book of Broken Promises; $400 Billion Broadband Scandal” I dedicated chapters to the various Verizon-Bell Atlantic deals known as “TeleTV” and AT&T’s “Americast”, where over $½ billion dollars was thrown down the toilet so that they could meet movie stars and claim that they were bringing new content on their fiber optic information superhighway that never showed up.
Considering all of the floundering of AT&T and DirecTV, investors should have realized that mergers and purchases of entertainment and media was the trumpet sounding for losses coming.