AOL Has Been in Talks to Spin Off HuffPost as Part of Verizon Acquisition Deal

Apparently, while it has been negotiating its deal to sell to Verizon, AOL has also been in advanced discussions with a number of parties to spin off its flagship Huffington Post content unit. The talks have been most serious with Axel Springer, the German media conglomerate, but a number of private equity firms have also expressed interest in the high-profile property. Sources said the Huffington Post has been valued at above $1 billion in this scenario, which would either be a complete sale or, more likely, structured as a joint venture. The move would be designed to bring in more investment for growth for the Huffington Post, which AOL bought several years ago for $300 million.

High content costs and the ability to monetize those assets, as well as grow them -- AOL also owns TechCrunch and a number of other content properties -- has been hard for the company. And competitors like BuzzFeed and Business Insider have garnered massive fundings to spur expansion. AOL’s earnings report from Q1 spells out the issue quite clearly: Its “Brand” group -- which includes HuffPo and TechCrunch -- grew its revenue by eight percent over the past year and posted operating income of $13 million. Meanwhile, its “Platforms” group -- which specializes in automated ad sales on other publishers’ properties -- grew by 21 percent but lost $10 million. Of course, Verizon could pony up more dough for the site’s leader, Arianna Huffington, part of a alleged strategy on the part of the phone giant to own more content. But sources said Verizon was far more focused on advertising tech and video and that some kind of spin-off or joint venture was far more likely for the Huffington Post.