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AOL just bought The Huffington Post for $315 million.If Arianna Huffington and her crew have any rival in the blog world, it’s Gawker boss Nick Denton.
So we asked him what he thought of the deal.
He said, “I thought they were holding out for a billion.”
For Huffington Post, the alternative to doing this deal would have been waiting for a better offer or raising more money and preparing for an IPO.
The latter would have taken a couple of years (IPOs take an insanely long time these days), and there would be no guarantee that the IPO market would be there when you wanted it. The economy could crater, the stock market could tank, etc., and you wouldn’t even be able to cash out completely on the IPO.
So, for Huffpo shareholders, the calculation was $300 million of cash now or much less cash plus a lot of stock in a possibly public company in a couple of years. Unless Huffington Post was nearly guaranteed to be worth $1+ billion as a public company someday, the $300 million of cash now is mighty enticing.
As to waiting for a better offer… Huffpo has talked to NBC and Yahoo in the past 6 months. NBC, presumably, wouldn’t have gotten anywhere near this price. Yahoo, apparently, was moving at a glacial pace. So when this offer materialised, Huffpo reportedly didn’t even bother to check back with either of these two potential buyers, or any others for that matter.
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