The Other McCain : Page 2368 : "One should either write ruthlessly what one believes to be the truth, or else shut up."

After this morning’s stunning news that AOL had agreed to pay more than $300 million to buy the Huffington Post, I tried to find some argument to justify the deal.

Honest, I did. I even read Felix Salmon’s analysis at Reuters:

The $315 million that AOL is paying for the Huffington Post is roughly 3X the valuation seen at its last capital raise two years ago, is 10X its 2010 revenues and is roughly 5X estimated forward 2011 revenues. Those are all big numbers, but not insanely so, for what is clearly a big strategic move on the part of AOL. After all, AOL has a market cap of $2.3 billion: right now it still dwarfs HuffPo. That might not be true in a few years’ time, if HuffPo continues growing at its current rate and AOL continues to lose subscribers and revenues.
My feeling, then, is that this deal is a good one for both sides.

Yeah, tell me another one, pal. HuffPo extimates its 2011 revenue at $50-odd million, but what about its net profit?

What’s that Felix? I can’t hear you for all these crickets chirping.

Jerry at Goldfish and Clowns is also wrestling with the finances of the deal:

The only semi-rational logic behind AOL shelling out serious coin for HuffPo is the belief Huffington’s lightworker abilities will somehow draw ten bajillion visitors per nanosecond to AOL . . .

The market isn’t buying that argument and AOL stock, which was trading at $24 a share a week ago, is now down to $21 and change. The Wall Street Journal‘s Shira Ovide has a good analysis of this floptastic deal while my friend Donald Douglas examines, “What Huffington Post Means for Journalism’s Future.”

What it means, I suspect, is that the Left is willing to “invest” in liberal media ventures that are supposedly for-profit but which, in fact, lose money. Because, after all, whose money is being invested? Not theirs.

Five words: Government employee union pension funds.

That, I suggest, explains this whole deal. Private investors are now selling their AOL shares, while managers of pension funds for AFSCME, SEIU and other unions are buying AOL stock, thus providing the investment capital necessary to fund expansion of the Left’s online media presence in advance of Obama’s re-election campaign.

Yeah, and maybe George Soros is buying AOL stock, too, for all we know.

Call me a kooky conspiracy theorist, if you like, but when a business deal doesn’t add up as dollars-and-cents capitalism, there must be some other explanation. And if ever you see a turtle sitting on top a fence post, you know it didn’t crawl up there by itself.

Because I’m Stupid, You See

Posted on February 7, 2011February 7, 2011Comments

At what point did youngsters decide that their elders needed history lectures? This is not a moot question, for I find myself being lectured by Conor Friedersdorf:

What’s actually gone on in the United States since the year 2000? For almost eight years, the Bush Administration managed to keep the support of its base, despite pursuing all manner of idiotic policies. And they did so in large part by relying on sycophantic propagandists. Rush Limbaugh himself admitted to carrying water for Republicans during that era despite thinking they were taking the country in the wrong direction. And many pundits, especially on Fox News, behaved even worse. . . .

Friedersdorf then goes on to talk about how “Bill Buckley and George Will helped Ronald Reagan win the presidency” at a time when “The New York Times and the network news ruled the media, and Rush Limbaugh was working as director of promotions for the Kansas City Royals.”

Right. And all this time, Conor Friedersdorf was actively engaged in advancing the conservative cause. He has spent his entire life with his finger on the pulse of the body politic, and is thereby qualified to lecture us about What It Really Means.

Perhaps, as he makes reference to the year 2000, Friedersdorf would care to know what I was doing that year. Continue reading Because I’m Stupid, You See →

Don’t Worry, Egypt: He’ll Pull Out

Posted on February 7, 2011Comments

Obama sending “multiple platoons” of Marines to Egypt “to assist in the evacuation of US citizens”?

Why would the administration make a panic gesture like that? Let’s see: Arbitrary detentions of foreigners. Yeah, that’s not a good sign. Muslim Brotherhood negotiating with Mubarak regime? Also not a good sign.

If the administration is gearing up for a full-on freakout in Egypt, why should anyone else be optimistic?

Yeah, About the Super Bowl

Posted on February 7, 2011Comments

You will recall that I predicted the Obama Jinx would doom the Steelers. So all you Steelers fans who scoffed at my prophecy, suck it.

Speaking of sucking, did that halftime show suck or what?

The Black-Eyed Peas were exposed as the Milli Vanilli of the 21st century. Take away their studio effects, and what are you left with? A rap group with a white chick dancing around, pretending she can sing. I’ve seen better acts at a karaoke bar.

Also, Christine Aguilera screwed up the national anthem. The NFL should have a policy: If you’re hired to sing “The Star-Spangled Banner” and you screw it up, you don’t get paid.

The game itself was similarly plagued by screw-ups. I counted at least four dropped passes by Green Bay receivers, and I didn’t even watch the whole game. When I play catch with my sons, I tell them: “See the ball, catch the ball. Look the ball into your hands.”

If you can reach it, you can catch it.

Catching a football is about concentration — a matter of mind-power — and while it may be difficult to concentrate when a cornerback is chasing you, there was simply no valid excuse for professional players on a championship team to drop passes like that.

They ought to be running wind sprints this morning, as punishment. Dropped passes, fumbles, missed tackles, penalties — stuff like that, you make ’em show up at the field the next morning to run a certain number of wind sprints per punishment. I don’t care if you just won the Super Bowl, team discipline permits of no such exceptions.

Don’t like it? Find another line of work.

Too Bad Mike Castle Lost

Posted on February 7, 2011Comments

He could become part of the Let’s Try to Cram Through Immigration “Reform” Again Caucus:

Sens. Lindsey Graham (R-S.C.) and Chuck Schumer (D-N.Y.) have rekindled their alliance on immigration reform, taking some early steps to test the political will for addressing the contentious issue this year.
Their call list hasn’t focused so much on House and Senate members who’ve been reliable pro-immigration votes in the past. Instead, they’re looking to a strange-bedfellows mix of conservative and liberal constituencies that can provide a “safety net” of support, as Graham put it, once the issue heats up.

Any such legislation would be DOA in the House, which means that this is just a scam to hustle campaign cash from open-borders advocates, including the U.S. Chamber of Commerce.

Yeah, too bad Mike Castle lost that GOP primary in Delaware. Also too bad Charlie Crist and Arlen Specter aren’t in the Senate, so they could cash in on this RINO fundraising windfall.

Please: Explain to me again why it’s so damned important to elect Republicans to the Senate.

David Cameron to Brits: ‘They Be Snatching Your People Up Out Here’

Posted on February 7, 2011February 7, 2011Comments

The prime minister channels Antoine Dodson:

David Cameron has criticised “state multiculturalism” in his first speech as prime minister on radicalisation and the causes of terrorism.
At a security conference [Saturday] in Munich, he argued the UK needed a stronger national identity to prevent people turning to all kinds of extremism.
He also signalled a tougher stance on groups promoting Islamist extremism. . . .
“Frankly, we need a lot less of the passive tolerance of recent years and much more active, muscular liberalism,” the prime minister said.

You may wonder how the “hide your kids, hide your wife” angle fits here, but note this part of the story:

The speech angered some Muslim groups, while others queried its timing amid an English Defence League rally in the UK.

Hmmmm. Let’s see, the English Defence League staged an event in Cameron’s home district of Luton and perhaps, indeed, we should question the timing. Why would there be a recent upswing of EDL support in Britain? Why would this “right-wing” sentiment represented by EDL be sufficiently strong that the Tory PM felt obligated to criticize “multiculturalism” and “passive tolerance” toward Islamic extremism?

You won’t find the answer in the respectable mainstream press, but let us turn to the Communist Party’s British publication, the Morning Star:

The EDL . . . tars all Muslims with religious intolerance and systematic criminality based on “cultural” attitudes.
[EDL spokesman Stephen] Lennon would have us believe that Muslim gangs push heroin outside schools, that schoolgirls are forced to wear the burqa, that Muslim gangs murder non-Muslim youth with impunity and that 15-year-old girls are routinely raped and pimped by Muslim gangs.
And this “systematic rape of our youth,” in which Muslim communities are supposedly complicit because of a “cultural thing” goes unchallenged by the authorities “because of a fear of being called racist,” according to the EDL.

Do you perhaps recall the lurid Fleet Street headlines? C’mon, my fellow Americans: Where did you first read about the U.K. Muslim “rape gang” scandals?

Nov. 26: Muslim Men Led U.K. Girl-Rape Gang
Nov. 27: Report: ‘Issues of Culture, Ethnicity and Identity’ Raised in U.K. Rape-Gang Case
Nov. 30: Muslim Columnist: U.K. Rape Gang Case Exposes ‘Disgusting Cultural Beliefs’
Jan. 24: VIDEO: British Girl, 13, Says Rape Threats Are ‘Happening to Lots of Girls’ at School

To borrow a phrase, this blog is on the cutting edge of societal evolution. Continue reading David Cameron to Brits: ‘They Be Snatching Your People Up Out Here’ →

AOL Pays $315 Million for HuffPo

Posted on February 7, 2011February 7, 2011Comments

Curiouser and curiouser:

The Huffington Post, which began in 2005 with a meager $1 million investment and has grown into one of the most heavily visited news Web sites in the country, is being acquired by AOL in a deal that creates an unlikely pairing of two online media giants.
The two companies completed the sale Sunday evening and announced the deal just after midnight on Monday. AOL will pay $315 million, $300 million of it in cash and the rest in stock. It will be the company’s largest acquisition since it was separated from Time Warner in 2009. . . .
Arianna Huffington, the cable talk show pundit, author and doyenne of the political left, will take control of all of AOL’s editorial content as president and editor in chief of a newly created Huffington Post Media Group. The arrangement will give her oversight not only of AOL’s national, local and financial news operations, but also of the company’s other media enterprises like MapQuest and Moviefone.

Question: What would AOL have paid for the Drudge Report, which throws so much traffic it can melt down your servers? But other questions come to mind:

Go over to Matt’s page at AOL’s Politics Daily, scroll down and you’ll see, “News From Our Partners” — which include Salon, Newser, The Daily Beast, Fox News, ABC, Time and The Week. What becomes of those partnerships? I dunno. But the news from AOL’s Daily Finance is simple:

AOL announced today that it has entered into a definitive agreement to acquire The Huffington Post, the influential and rapidly growing news, analysis and lifestyle website founded in 2005, which now counts nearly 25 million unique monthly visitors.

Twenty-five million uniques at HuffPo? Really? And that makes it worth (a) $315 million and (b) hiring Arianna as an executive editor?

Our own traffic has amounted to 200,000+ visits per month since August. Although those numbers aren’t the same as “uniques,” the data is public — it’s there on SiteMeter, available for analysis to anyone who cares to look — and can be compared to any other site that makes its SiteMeter data public.

OK, so to get from 200,000 to 25 million, you just move the decimal point a couple of places over and . . . Big Fur Hat invites offers from AOL: “Wanna buy iOTW? We’ll allow you to overpay for us too.”

Which is exactly right: AOL paid waaaay to much for that site, and as for the value of Arianna Huffington’s services as an editorial executive: What are they paying her for that? Whatever it is, they’re paying too much.

I’m sorry: $315 million for 25 million monthly uniques? No, that’s crazy. The only way this deal makes any sense at all is as a bid to increase market share: AOL is buying out what had previously been a competitor for its own news products. That an online media giant is now buying up a content provider — and paying such an inflated price — is a signal of market confusion.

Speaking of confusion, Stephen Green asks: “Where did AOL come up with $315 million?”

Good question. This deal smells like last week’s fish.

UPDATE: Further analysis at The American Spectator: “Did they misplace the decimal point?”

UPDATE II: Helpful background from Associated Press:

[AOL’s] fourth-quarter results show it is still struggling to boost ad sales. AOL had just a 5.3 percent share of the U.S. display advertising revenue in 2010, down from 6.8 percent in 2009 . . . Facebook, meanwhile, accounted for 13.6 percent of display revenue last year, up from 7.3 percent in 2009. . . .
The work of [HuffPo’s] 70-person paid staff is augmented by content from news outlets and 6,000 bloggers who write for free.

OK, now figure about $75,000 per paid staffer (salary+benefits), and your annual payroll is somewhere north of $5 million.

So the price paid by AOL is equal to more than 50 years of salaries at HuffPo? Whiskey Tango Foxtrot?

Next question: How many of HuffPo’s 6,000 bloggers (???) are going to continue writing for free at a site that just collected a $315 million buyout?

If AOL calculated those bloggers into the value of the deal . . . well, good luck with that.

UPDATE IV: Of course there’s a huge Memeorandum thread, via which we get John Hawkins:

The world’s not a fair place. Someone as incompetent as Barack Obama is President, The Black Eyed Peas got to play the Super Bowl, and Arianna Huffington is now worth $300 million dollars. That’s the breaks, brother, and we just have to roll with it.

To hell with fairness. What I’m wondering is, if HuffPo is worth $315 million, what’s Hawkin’s asking price? One meeeellion dollars?

UPDATE V: Da Tech Guy points out that AOL also just bought the legions of hateful HuffPo commenters, and Purple Avenger at AOSHQ notes further evidence that maybe AOL CEO Tim Armstrong isn’t the sharpest tool in the shed: Last year the company lost $782 million.

Think about that. I’ve done some stupid things in my life, but losing $782 million? No. Never did that.

UPDATE VI: Chris Wysocki in the comments: “Who wants to lay odds that AOL is going to be the source of Keith Olbermann’s next paycheck?”

Yeah, Scared Monkeys made a similar analogy: HuffPo as the MSNBC of AOL. The Lonely Conservative wonders how long before AOL demands a government bailout.

Professor Reynolds mockingly says the ridiculous price paid for HuffPo “means that InstaPundit’s valuation just skyrocketed,” when of course it means no such thing. Because this deal makes no sense as a business proposition, it cannot be weighed in as a factor for calculating the value of any other Internet property.

What has been proven, if anything, is that there is a sucker born every minute. But we knew that already.