The Guardian article about Arianna Huffington “selling out” to AOL (which was subsequently bought out by Verizon) made me think of something that Steve Jobs said to Walter Isaacson when Isaacson was writing his biography. There was no succinct quote, but Jobs essentially complained about a lot of successful entrepreneurs that sell their companies after becoming successful. He said he thought it was more beneficial to continue doing the work of building up the company that was started.
It’s easy to look at this from a purist point of view. No one likes sellouts and everyone wants to see the founder of a successful company continue doing their work, because they tend to know how to do their work better than some conglomerate that wants to buy them.
But it’s important to consider the person in that position. They are still human. Perhaps the time commitment to their company is taking too much time away from their family. Or maybe they were only in that business for the money and selling the company at this point in time is the best way to make that money. Another possibility is that they want to sell their business to invest elsewhere.
In an interview that Huffington did with Inc, Huffington explained that she wanted to sell the company so that it could expand faster. She said that the board and the HuffingtonPost investors did not want to sell and that she had to go out of her way to convince them to do that.
In class, there has been a lot of scrutiny and criticism of her decision to make that sale. However, as I’ve done a little research about the deal online, it appears that a lot of people in the business community thought it was a great decision at the time and in succeeding years. The HuffingtonPost expanded big time and went global at a pretty fast-paced. The timing and execution of the sale seemed perfect.
It was a shortcut of sorts that seemed to pay off. Even with the Verizon acquisition of AOL, some analysts believed that the HuffingtonPost seemed to benefit. Then came the layoffs two years later.
To be honest, if I were in her position, I probably would have made that same decision. There was no way of knowing that Verizon would buy AOL and the HuffingtonPost was a rising star. There was no guarantee that the HuffingtonPost’s star power would continue and the only logical way of ensuring its relevance was by expanding, which the AOL acquisition would allow for.
That being said, in hindsight, it definitely feels like a bad decision. Especially knowing that Verizon would purchase AOL. Verizon is a bad company.
The Guardian also points out to the issue how the bloggers were treated. While they did get a lot of free publicity, they were not paid for all their hard work. When HuffingtonPost became flush with money from the acquisition, many of the bloggers that had built that organization were not paid for their hard work, even though there was a lot of money coming into the HuffingtonPost. Some of them, I believe, were hired before the blogging program got shut down. But naturally this led to people feeling betrayed.
In some cases, I think selling out can be a good thing. But in this case, I think Huffington’s decision was probably the wrong one. As tough and scary as it can be to build a company up without taking shortcuts, sometimes that can really pay off in the end.
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