That a 57-year-old divorced Greek immigrant would become the reigning queen of online
political chat might come as a surprise to the legions of teens and
twentysomethings who frequent discussion forums on the Web known as blogs. But
that’s exactly what Arianna Huffington did. In May 2005, this author, lecturer, Cambridge graduate, mother of two and
now Internet impresario founded the Huffington Post, an online discussion forum
that attracts 3.5 million visitors daily. Technorati, a media analysis firm
that tracks more than 105 million blogs, ranks the blog as one of the top five
on the Web in terms of the number of sites linked to it. More importantly,
however, Huffington and her business partner, former Time Warner executive Ken
Lerer, successfully turned the Huffington Post into an extremely rare thing in
the blogosphere: a financially sound forum with an advertiser-driven revenue
model. Within one year of its launch, the site attracted $5 million in venture
capital from SoftBank Capital—a VC firm with offices in Boston, New York and
Buffalo—and Greycroft Partners in New York, both of which specialize in
digital-media investments. (Since then, there has been a second successful round
of VC funding.)
Huffington, Lerer and their original investors, who kicked in a
reported $2.5 million in seed money, have reaped handsome returns. Furthermore,
the Huffington Post, with its celebrity contributors and golden visitor
demographic—postgraduate, upper-income—is quickly becoming the blueprint for
blog success. Huffington won’t disclose exactly how much advertiser revenue the
blog generates, but it is sufficient to support a growing staff of 45 on both
coasts. (Lerer has said publicly that he expects the Huffington Post to be
profitable by some time next year.)
 | | (Photograph by Kevin Lynch.) |
This success was not a given, as Huffington herself concedes.
She is a politically polarizing figure who very publicly went from being the
wife of an affluent Republican politician to running as a populist candidate for
the California governorship to becoming a contrarian, left-leaning media gadfly.
Her launch of the blog was greeted with derision by many in the media. Yet she
prevailed. From her Brentwood home in Los Angeles, she recently discussed the
Huffington Post, its winning business model, and how she found the courage to
stare down her critics and rewrite the rules of new-media success.In the Huffington Post [HP] you’ve created a very successful
new-media venture. How have you succeeded in an arena where so many others have
failed?
The key to our success was our
timing. We were the first to do a collective blog with multiple voices. At the
same time, we have breaking news constantly refreshed, together with opinion on
that breaking news, as well as on topics that are more perennial. The
combination of those factors coming together for the first time online, with a
certain attitude and with a really good, clean design, is the winning
formula.
After being live for a relatively short time, you were able to
line up venture capital investors to invest several million dollars, which is highly unusual in the
business of blogs.
SoftBank has done
two rounds of financing for us. Originally, the
Huffington Post was financed primarily by our family and friends. People who
really believed in what we were doing put in $100,000 each and probably thought
they would never see it again. Shortly thereafter, they were able to cash out
and take back three times their investment. That’s when SoftBank came in with
its first $5 million. How active are your venture capital investors in HP’s strategic planning and growth?
What has been great for me is
that I love who I’m working with. Eric Hippeau [SoftBank’s managing partner] has
been not just an investor, but an incredible strategist. He and his colleagues
really understand new media. They never interfere with content, but in terms of
helping us see the direction we are taking and our expansion, they do play an
active role. It is like a dream to have a great partner who is strong where I am
weak. You know, I studied economics at Cambridge, but it has never been
something that interested me. My eyes glaze over when I am given too many profit
and loss statements to look at.
When you founded HP, did you see it more as a business venture or
as an expression of your passion for politics?
The Huffington Post certainly was an expression of my passion and the passion of my business
partner [Ken Lerer]. We were introduced at a dinner in New York by some mutual
friends, Tom Freston [the former president of Viacom] and his wife, Kathy, and
we hit it off right away.
During the 2004 presidential election, we watched the way the
media were covering the campaign, and we saw a clear need for a different
approach to covering news and opinion. That was really the impetus behind
creating the Huffington Post. We always knew we wanted to be
advertising-sustained, but we didn’t know if it would be advertising-sustained
at the level of six employees [the number it started with] or 45 employees [the
current level], or how large the venture would grow.
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