AOL-Huffington Post merger an echo of robber-baron economics?

posted at 1:36 pm on February 9, 2011 by Ed Morrissey

It’s safe to say that LA Times’ columnist Tim Rutten is no fan of the AOL-Huffington Post merger.  In today’s column, Rutten warns that the economic model pushed by AOL and accelerated by Arianna Huffington’s plans will not only push traditional journalists from what few paying gigs they can find in New Media, but will usher in a robber-baron era in the industry, with unpaid writers acting as “galley slaves,” while the new AOL demands ramming speed to make up for their investment:

Consider first AOL’s pre-merger efforts, which centered on a handful of commentators and a national network of intensely local news sites called Patch. The quality of those efforts varies widely, but the best ones are edited by journalists who lost their jobs in the layoffs and buyouts that have beset traditional news organizations over the last decade. These editor-reporters are given reasonable benefits and salaries that are about what beginning reporters at major newspapers were paid three decades ago. Their contributors, by contrast, are paid a maximum of $50 an article, often less.

The results pretty much conform to the old maxim that you get what you pay for; the best Patch journalism almost invariably is being done by experienced journalists who do the work out of idealism or desperation. What happens when that pool of exploitable surplus labor dries up — as it will with time — is anybody’s guess, but the smart money would bet on something that isn’t pretty.

In this merger, though, that pool may not dry up as much as it will become superfluous.  As I noted yesterday, Huffington plans on enticing thousands of people to blog on campaign-related events in 2012, hoping to find an occasional golden needle in massive numbers of haystacks.  That is what happened when Mayhill Fowler reported Barack Obama’s “cling to guns or religion” remarks in San Francisco at a private fundraiser, complete with audio, as part of Huffington’s OffTheBus project.  Fowler wanted to get a salary from HuffPo, and quit when they refused.  The OffTheBus project, Huffington said earlier this week, will be her model for the expanded 2012 coverage through Patch, which is where journalists have at least made some money from local reporting until now, as Rutten notes.

That’s where Rutten charges AOL and Huffington Post of concocting galleys and sweatshops in an echo of the robber-baron era:

To grasp its business model, though, you need to picture a galley rowed by slaves and commanded by pirates. Given the fact that its founder, Huffington, reportedly will walk away from this acquisition with a personal profit of as much as $100 million, it makes all the Post’s raging against Wall Street plutocrats, crony capitalism and the Bush and Obama administrations’ insensitivities to the middle class and the unemployed a bit much.

The fact is that AOL and the Huffington Post simply recapitulate in the new media many of the worst abuses of the old economy’s industrial capitalism — the sweatshop, the speedup and piecework; huge profits for the owners; desperation, drudgery and exploitation for the workers. No child labor, yet, but if there were more page views in it…

To some extent, this is unfair.  After all, no one will force these aspiring “galley slaves” into drudgery and exploitation.  Most of them, if not all, could easily self-publish on their own blogs — and it’s a fair guess that most of them will.  They will use their AOL-HuffPo exposure to direct some traffic back to their own blogs, hoping themselves to catch lightning in a bottle and make their mark.  It will be akin to buying a lottery ticket, but the odds are somewhat better, and the only cost these “galley slaves” will endure is lost time and perhaps opportunity costs.

However, Rutten is on more solid ground when he criticizes the economic model for its impact on journalism.  AOL has turned its back on the professional, balanced approach taken over the last two years (ironically, in a move away from blogging).  Flooding Patch and AOL with thousands of amateurs will undoubtedly dilute the reach, attention, and credibility of the professional writers and journalists that remain with the site.  The terms of the deal almost guarantees that AOL/HuffPo will have to cut its investment in paid writing as well.

As AOL moves towards a HuffPo diary environment, they’ll become less relevant and less attractive for those writers anyway.  They may excel at search-engine machinations to drive page views, but as activism replaces journalism, the site will attract mainly the same audience as Huffington Post gets now.  In the end, that may create better opportunities — elsewhere.


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Using a photo of Jewish slaves……sneaky.

BobMbx on February 9, 2011 at 1:38 PM

Well the Free exchange of ideas is turning out to be just that.

Geochelone on February 9, 2011 at 1:39 PM

but as activism replaces journalism, the site will attract mainly the same audience as Huffington Post gets now.

spot on…

SS, different website…

cmsinaz on February 9, 2011 at 1:42 PM

I find it ironic that AoL lost the same amount in stock price that it payed for that HuffPo POS. Some of my favorite blogs are part of AoL. Its a shame I might have to stop visiting them if that libtard cancer spreads further.

Wolftech on February 9, 2011 at 1:42 PM

Ramming speed!

tomg51 on February 9, 2011 at 1:42 PM

Hey Ariannah dahling you r just a slayve now my princess.

BTW, you HuffPo contributors and commenters how’s it feel to be a part of “BIG INTERNET”?

PappyD61 on February 9, 2011 at 1:43 PM

I have a sneaking suspicion that AOL’s dreadful unhipness is the real motivation behind the lefty anger on this.

Missy on February 9, 2011 at 1:45 PM

What if they had a website and nobody came?

John the Libertarian on February 9, 2011 at 1:45 PM

I have one AOL domain in my email address book. One.

Akzed on February 9, 2011 at 1:46 PM

The fact is that AOL and the Huffington Post simply recapitulate in the new media many of the worst abuses of the old economy’s industrial capitalism — the sweatshop, the speedup and piecework; huge profits for the owners; desperation, drudgery and exploitation for the workers. No child labor, yet, but if there were more page views in it…

Shorter Tim Rutten:

The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.

JeffWeimer on February 9, 2011 at 1:46 PM

Pure unadulterated Capitalism.

This shows the Huffy thing from the get go was a sham.

This are lights years away from the “truth-to-power” anti-capitalist Progressive tenets they claimed they hold so dear.

In the end, it is always about the Benjamins with these faux wealthy Progressives and they play their basement dwellers followers into thinking they are for the working class and middle class, yada yada yada, when in fact they are just like us Conservatives.

Capitalists through and through.

Opposite Day on February 9, 2011 at 1:46 PM

Little people are useful, but not valuable.

Akzed on February 9, 2011 at 1:47 PM

In order to make money doing something that other people do for fun, you have to be demonstratively better at it.

Count to 10 on February 9, 2011 at 1:48 PM

The way it looks to me, the more apt business model for AOL-HuffPo is Jeffrey Immelt’s MSNBC, where investment capital is quietly diverted into supporting a Leftist money-pit propaganda machine.

From The Other McCain:

Private investors are now selling their AOL shares, while managers of pension funds for AFSCME, SEIU and other unions are buying AOL stock

“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.”

petefrt on February 9, 2011 at 1:48 PM

In time, I suspect we will hear the Marge Schott-esque assessment of the Huffpo/AOL merger from the left:

Hitler HuffAOL was good in the beginning, but went too far.”

juanito on February 9, 2011 at 1:48 PM

Rutten: “Journalism is information collected and analyzed in ways people actually can use.”

That bit there is why Rutten and his ilk needs to be unemployed. “Journalists” (AKA: ‘reporters’) are supposed to just tell readers the ’5 Ws’ and keep their opinions to themselves. If you follow Rutten’s definition, you’re just another blogger, and Arianna was savvy enough to rope in enough dopes willing to work for free and create, for her and her investors, a huge pile of money.

TC@LeatherPenguin on February 9, 2011 at 1:50 PM

petefrt on February 9, 2011 at 1:48 PM

Keep in mind that he has no information that any trades like that are actually happening. He’s just speculating that its possible they could be.

Count to 10 on February 9, 2011 at 1:50 PM

I know that this is a stretch but are these the same folks who can’t rustle up any outrage or interest in young underage girls being imported as sex slaves?

Cindy Munford on February 9, 2011 at 1:51 PM

What journalists need are UNIONS. They need to organize, and then they need to score a government position with the Ministry of Information.

Organize, seize the future. End the outsourcing of journalism. Demand a new Government Ministry where facts are the important thing, where accredited experts analyze the facts and publish unbiased commentary.

Win the Future through UNION organization; were wages are fair, and benefits are appropriate.

Like the democrats always say, the only reason why people join the military is because they can’t find a job, so all you journalists join the UNION, or join the military.

Skandia Recluse on February 9, 2011 at 1:51 PM

How much of that money is Arianna going to redistribute to those beneath her? I’m guessing….not one d@mn dime!

capejasmine on February 9, 2011 at 1:52 PM

Opposite Day on February 9, 2011 at 1:46 PM

This is the standard Operating Procedure of the Race hustlers—Jackson and Sharpton—and Climate scam artists like Al Gore. And yet they claim to act solely for the benefit of mankind. How noble of them.

Follow the money, fools.

Geochelone on February 9, 2011 at 1:53 PM

This is closer to the error Murdoch made when he bought MySpace and thought that the domain would keep the people there that had made it worth the millions Rupert paid for it. What he found out was that people who work for nothing out of their own free will also can go someplace else to post the minute-to-minute goings-on with their lives, and his investment cratered when people migrated over to Facebook and Twitter.

Part of the crowd that moved did so for ideological reasons — the liberals on MySpace couldn’t bear the thought of providing free content to Rupert-freakin’-Murdoch — and the same thing’s going to happen here. Combined with the money Arianna is getting for the free content they provided and AOL’s decidedly un-hip image, they’ll bolt for the first liberal website that offers the required hipness quotient and whose administrators promise not to jilt them like that traitorous capitalist Aristotle Onasis wanna-be did.

jon1979 on February 9, 2011 at 1:53 PM

It’s all well and good and fun to rub salt in the canker of Huffington’s hypocrisy, but really, we shouldn’t want to change her business model even if we had the power.

I mean, this is what these people are advocating, right? Working hard for change without consideration for personal profit. Or sustenance! I like to imagine the conversations, when one of the unpaid workers complains and is eventually scolded for selfishness.

It will be instructive for these people to work in an environment of their own preference. Or rather, it should be instructive, but largely won’t.

HitNRun on February 9, 2011 at 1:54 PM

“To all you volunteers, you effed up, you believed us.”

-A. Huffington

Bishop on February 9, 2011 at 1:54 PM

That’s where Rutten charges AOL and Huffington Post of concocting galleys and sweatshops in an echo of the robber-baron era:
=============

Well then,me thinks,all these writers,and would-be`s,
should get UNIONIZED,that`ll work!!

canopfor on February 9, 2011 at 1:54 PM

In order to make money doing something that other people do for fun, you have to be demonstratively better at it.

Count to 10 on February 9, 2011 at 1:48 PM

dig it

equanimous on February 9, 2011 at 1:55 PM

She later explained the “transformation” of her political views by saying the right had “seduced, fooled, blinded, bamboozled” her.

That’s crazy talk. Nobody bamboozles Arianna Stassinopoulos Huffington. If anybody was fooled, it was those who believed she would be a more enduring progressive than she was a conservative.

Indeed, indeed. She was always a socialist, who latched on to any opportunity and exploitation possible. She is the female version of Obama, just smaller scale, for now.

Schadenfreude on February 9, 2011 at 1:56 PM

I sense a new “right” being discovered somewhere, probably in the wording of the commerce clause.

Bishop on February 9, 2011 at 1:56 PM

HuffPuff
Journolisters 2012!

canopfor on February 9, 2011 at 1:57 PM

Blogger 42: 41, why did he unlock your chains?
Judah Ben-Blogger: I don’t know. He must have met Arianna Huffington.

Rocks on February 9, 2011 at 1:58 PM

Count to 10 on February 9, 2011 at 1:50 PM

I agree that he doesn’t document it, but he says “AFSCME, SEIU and other unions are buying AOL stock”, so I have to expect he has seen data to back it up. I’m hoping it will attract interest enough for some one to investigate further, as I have a hunch he’s on to something here.

When you think about it, why wouldn’t AFSCME, SEIU and other unions put their pension fund investments in the service of leftist politics. It makes perfect sense.

petefrt on February 9, 2011 at 1:58 PM

I wonder how many current contributors they’ll keep. That lot sounds pretty grouchy about the merger.

And if they leave, they may be hard to replace. Good writers aren’t all that rare — but they’re not all that common, either.

So Huffington loses her galley slaves, and AOL loses some of the poor dopes who pay them because they’re too lazy to kill their accounts.

Lose/lose.

S. Weasel on February 9, 2011 at 1:59 PM

Hey if these libtards want to work for free while Arianna is banking $300M, let them.

angryed on February 9, 2011 at 1:59 PM

With no sarc intended, I read a lot of news and commentary from all over the Web every single day, just like most of the commentariat. Until this merger, I did not know that AOL had some sort of news division, and I’d never heard of Patch. What does that mean? Not much, sort of like this merger.

elcapt on February 9, 2011 at 2:02 PM

Love that movie, and the line,

“We keep you alive to serve this ship. Row well… and live.”

VastRightWingConspirator on February 9, 2011 at 2:04 PM

Well then,me thinks,all these writers,and would-be`s,should get UNIONIZED,that`ll work!!

canopfor on February 9, 2011 at 1:54 PM

Make them live by their own rules. Good call.

Geochelone on February 9, 2011 at 2:04 PM

With no sarc intended, I read a lot of news and commentary from all over the Web every single day, just like most of the commentariat. Until this merger, I did not know that AOL had some sort of news division, and I’d never heard of Patch. What does that mean? Not much, sort of like this merger.

elcapt on February 9, 2011 at 2:02 PM

I’ll do you one better. Until this merger I didn’t know AOL was still in business.

angryed on February 9, 2011 at 2:04 PM

Time to ask this question again: does anyone use AOL for anything other than free e-mail addresses? Their software sucks (and it slows down the web experience), and they stopped being a relevant ISP, content-wise, about 10 years ago. This deal makes slightly more sense than if, say, The Daily Kos got bought out by Compuserve. But, not much…

joejm65 on February 9, 2011 at 2:05 PM

Ramming Speed!

http://www.youtube.com/watch?v=WXh1tW16V-8&feature=related

canopfor on February 9, 2011 at 2:07 PM

I was going to add some union snark, but truthfully, all of these lefties, Kos included, really need to watch out for their readers/contributors hitting on the idea of a co-op.

They stick with the model of user provided free content but remove the enrichment of the owner/operator and redirect any revenues back to their community.

rw on February 9, 2011 at 2:12 PM

Well then,me thinks,all these writers,and would-be`s,should get UNIONIZED,that`ll work!!

canopfor on February 9, 2011 at 1:54 PM
====================
Make them live by their own rules. Good call.

Geochelone on February 9, 2011 at 2:04 PM

Geochelone: Progressive Propagandist Union(PPU)haha:)

canopfor on February 9, 2011 at 2:13 PM

“Information wants to be free.”
wikipedia that one.

Look my card is online now.
http://www.netrunneronline.com/cards/back-door-to-orbital-air/

If you think the airlines are good at losing luggage, you should see what they can do with a trace attempt.

orbitalair on February 9, 2011 at 2:13 PM

When the Mayhill Fowler audio broke, Arianna was on David Geffen’s yacht in the South Pacific.
Both are far left hypocrites. It would almost be funny if their favorite gov’t appropriated the yacht for homeless people to live.

lonestar1 on February 9, 2011 at 2:13 PM

Rush is on this,haha!

canopfor on February 9, 2011 at 2:14 PM

Looking forward to the Twiawanese Animation video of
Slave HuffPuff Labours!!!(sarc).

canopfor on February 9, 2011 at 2:16 PM

Rush is on this,haha!

canopfor on February 9, 2011 at 2:14 PM

Yep, “it’s like AOL buying Air America”. Sniff it out, El Rushbo. Let’s watch who buys AOL stock from here on out.

petefrt on February 9, 2011 at 2:18 PM

In fact not only does Puff-Ho pay poorly, they sometimes charge for their positions: Huffington Post Offers Paid Internship: The Intern Pays!

slickwillie2001 on February 9, 2011 at 2:21 PM

The prequel to Hansel and Gretel: Useful idiots enter the gingerbread house and end up in the oven.

Demosthenes on February 9, 2011 at 2:23 PM

To grasp its business model, though, you need to picture a galley rowed by slaves and commanded by pirates.

This is the business model for Democrats running the federal government. Since AOL has spent millions to buy something of no real value, a better example for the AOL/HuffPo deal may be Al Gore’s carbon trading schemes.

Buy Danish on February 9, 2011 at 2:32 PM

Rush is on this,haha!

canopfor on February 9, 2011 at 2:14 PM
=====================
Yep, “it’s like AOL buying Air America”. Sniff it out, El Rushbo. Let’s watch who buys AOL stock from here on out.

petefrt on February 9, 2011 at 2:18 PM

petefrt:Àir America,ugh,haha!!:)

canopfor on February 9, 2011 at 2:34 PM

The OffTheBus project, Huffington said earlier this week, will be her model for the expanded 2012 coverage through Patch, which is where journalists have at least made some money from local reporting until now, as Rutten notes.

In other words, a conglomeration of liberal “journalist” who can write the best hit pieces that defame the Conservative Party—for free. Welcome to Arianna’s Sweat Shoppe, migrants need not apply.

Rovin on February 9, 2011 at 2:37 PM

I would be more interested in hearing Rutten if the reporters he speaks for were more interested in providing an informed citizenry that for defending their guild

when Rutten starts attacking the shoddy work they’ve done over the years in the Wakefield/Autism scandal I will be interested. Maybe he can shed some light on the most recent scandal about the non-defective Toyota electronics.

When will we have some serious journalistic efforts on the many urban myths that swirl around…answer, never. Puncturing these myths would largely deflate the social democrats that Rutten’s guild stands behind so fervently.

r keller on February 9, 2011 at 2:44 PM

Since AOL has spent millions to buy something of no real value, a better example for the AOL/HuffPo deal may be Al Gore’s carbon trading schemes.

Buy Danish on February 9, 2011 at 2:32 PM

Yep. Want to buy a Carbon Offset Credit? Wait while I fire up my laser printer and print you one. Fork over $500 first tho’ I gotta cover my costs for ink and paper.

Geochelone on February 9, 2011 at 2:44 PM

…so the Hortator comes down and he says:
“Men I have good news and bad news. First, the good news – we’re not scheduled to go anywhere today. Now, the bad news – the Captain wants to go water skiing…”

mojo on February 9, 2011 at 3:11 PM

aol share holders are the dumbest folks. they got violated where the sun dont shine.

moonbatkiller on February 9, 2011 at 3:13 PM

“As AOL moves towards a HuffPo diary environment, they’ll become less relevant and less attractive for those writers anyway.”

HuffPo was relevant at one time? When was that? I tried to read the crap that passes for posts there at one time but gave up. Pure garbage. That’s all it ever was and that is what it shall remain.

BTW, AOLs slavery model is alive and well in Internet writing, trade journal writing, and many other areas of the commercial press including news organizations. Just remember what the NYT did to freelancers just a few years ago. One of the few well paying rags was Playboy (don’t know what they pay now), but it used to be up to $3/word for some articles.

The world is full of suckers. Writers happen to have more of them than some other groups. And there are plenty of dirt-bag predators like HuffPo to take advantage of them.

woodNfish on February 9, 2011 at 3:26 PM

Using a photo of Jewish slaves……sneaky.

True, Ben Hur was a Jew but how can you tell about all the rest? There were huge numbers of slave in Roman, perhaps a third or more of the population of Italy, but I doubt if many were Jews in the early First Century.

Laurence on February 9, 2011 at 3:39 PM

AOL stock sheds $315M — HuffPo price tag

JammieWearingFool on February 9, 2011 at 2:19 PM

Over the same time that AOL has plunged, the rest of the market has roared.

pedestrian on February 9, 2011 at 3:51 PM

What journalists need are UNIONS. They need to organize, and then they need to score a government position with the Ministry of Information.

Organize, seize the future. End the outsourcing of journalism. Demand a new Government Ministry where facts are the important thing, where accredited experts analyze the facts and publish unbiased commentary.

Win the Future through UNION organization; were wages are fair, and benefits are appropriate.

Like the democrats always say, the only reason why people join the military is because they can’t find a job, so all you journalists join the UNION, or join the military.

Skandia Recluse on February 9, 2011 at 1:51 PM

Damn it. It would be funnier if it weren’t so soul-crushingly-true. I need a stiff drink now.

Chaz706 on February 9, 2011 at 4:02 PM

Using a photo of Jewish slaves……sneaky.

BobMbx on February 9, 2011 at 1:38 PM

C’mon now, that’s the Hollywood version of a Roman galley. Romans were equal opportunity slavers. They made slaves out of any people they conquered without regard to race religion or sexual preference.

Oldnuke on February 9, 2011 at 4:05 PM

Organize, seize the future. End the outsourcing of journalism. Demand a new Government Ministry where facts are the important thing, where accredited experts analyze the facts and publish unbiased commentary.

Skandia Recluse on February 9, 2011 at 1:51 PM

Journalists also need to prevent cut-rate news articles from coming in from overseas sweatshops, probably from semi-literate children forced to work with outdated and dangerous copies of Chicago Manual of Style.

pedestrian on February 9, 2011 at 4:10 PM

That figure of 315 millions is probably the amount of undisclosed debt, that AOL took upon themselves to bail out HuffPo. HuffPo cant be even close to the projections of revenue and profit they tout, and i dont think AOL or the market is dumb, by directly discounting AOL for this deal. Meaning something else is going on under the table, and Ariana would not be needing editorial job, if she made 80 millions on the deal.

anikol on February 9, 2011 at 4:18 PM

As for journalists working in slave shops, i will cry a tear, when i read good mainstream journalism, as of right now, they should line up for the money from “obama stash”.

anikol on February 9, 2011 at 4:19 PM

This is a multi-level marketing scheme. It’s like the Amway of journalism.

perries on February 9, 2011 at 4:45 PM

“After all, no one will force these aspiring ‘galley slaves’ into drudgery and exploitation,” nor for that matter was this done by so called “robber barons.”

burt on February 9, 2011 at 5:11 PM

They could always, you know, stop writing for her. Just a thought.

Or call SEIU!

PattyJ on February 9, 2011 at 5:14 PM

Given the fact that its founder, Huffington, reportedly will walk away from this acquisition with a personal profit of as much as $100 million, it makes all the Post’s raging against Wall Street plutocrats, crony capitalism and the Bush and Obama administrations’ insensitivities to the middle class and the unemployed a bit much.

THIS.

MikeknaJ on February 9, 2011 at 5:47 PM

burt on February 9, 2011 at 5:11 PM

Yeah I hate that term. Those so-called ‘robber barons’ gave us our modern industrial society and freed millions from a life of drudgery.

slickwillie2001 on February 9, 2011 at 5:52 PM

how r we defining the term journalist

georgealbert on February 9, 2011 at 8:22 PM

Poor Rutten. He didn’t think of it first.

unclesmrgol on February 9, 2011 at 10:36 PM