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AOL Waits for a Huffington Post Payoff

CEO Tim Armstrong bet big on Arianna Huffington’s distinctive brand. Why isn’t it paying off?
“We never said this was going to be an easy ride and that everything went smoothly”
“We never said this was going to be an easy ride and that everything went smoothly”Photograph by Brendan Smialowski/Bloomberg

Two years after their merger, seated side by side in a corner conference room at AOL’s Manhattan headquarters on March 20, Chief Executive Officer Tim Armstrong and Huffington Post founder Arianna Huffington say they couldn’t be happier. “Our relationship is the strongest it’s ever been,” Armstrong says, adding that he’d happily sign a new contract to keep Huffington past February 2015. She’ll re-up, she says, provided he stops throwing things at her. (She’s joking.)

When Armstrong paid $315 million for HuffPo in early 2011, he sought to reposition AOL away from its declining dial-up Internet access and search businesses in favor of ad-supported original content sites. His other gamble: making Huffington, the left-leaning doyenne of cable talk shows, the face of the new company, with a four-year contract and control of all of AOL’s editorial content, including Patch, TechCrunch, and more than a dozen other sites. The Arianna brand had digital cachet: She launched her news aggregator in 2005 largely on personal charm and connections, and built it into a clicks machine whose Web traffic, when AOL bought it, matched that of the New York Times. Announcing the acquisition, Armstrong called Huffington “a master of the art of using new media to illuminate, entertain, and enhance the national conversation.”