This paper discusses the growing success of The Huffington Post. The online publisher has become a prominent online news source over the years and this paper examines the success, while relating The Huffington Post’s strategy to common marketing analysis tools such as the Porter Five Force Analysis, as well as discussing four different revenue models for online publishers.
The Huffington Post In May 2005, the Huffington Post was founded by political activist Arianna Huffington, former AOL executive Kenneth Lerer and Jonah Peretti. The site focuses on political and cultural events and is supported by a large number of bloggers. The website is free to users and generates revenue through advertisements. Many different celebrities and politicians contribute to The Huffington Post, such as John Cusack, Bill Richardson, and John Kerry. Arianna Huffington is the editor in chief of The Huffington Post and is also a frequent blogger on the website.
While the site has thousands of posts with original content, it also borrows and reposts articles from other outlets in order to drive traffic. In fact, The Huffington Post was one of the first news sites to act as a aggregator for its readers by pulling articles from other publishers to one central website (Sarno, 2011).
The site has content sharing partnerships with content providers such as People, Rolling Stone and Yahoo, among many others. In 2011, The Huffington Post agreed to be purchased by AOL Inc. in a $315 million deal that joined the content of both websites together, in what is now called the Huffington Post Media Group (Sarno, 2011).
PAS BUSINESS STUDIES Business and Technology - assignment one 'E-commerce in the new millenium' 1. E-commerce means on-line trading and promotion, that is, buying, selling and advertising goods and services over electronic networks. Although e-commerce refers to all electronic transactions over any electronic network, today we tend to think of it as transactions carried out using the Internet. ...
Arianna Huffington serves as president and editor in chief of the new venture.
Since the acquisition The Huffington Post has expanded into new countries, such as Canada, the United Kingdom, France, Spain, Italy, Japan and Germany. In 2012, The Huffington Post was awarded its first Pulitzer Prize and also released a weekly digital magazine called Huffington. In addition, The Huffington Post created an online network called HuffPost Live, which encourages viewer participation. The site continues to draw new users through its multi-channel platforms.
The Huffington Post has become one of the most well-known news sites in the world. However, despite the success of the news publisher it must remain aware of competitive intensity of the market. Through the use of the Porter five forces analysis, the company can analyze the current condition of the business and also develop the business strategy in order to stay current in an ever-changing market. The five forces are as follows: the threat of new entrants, threat of substitute products or services, bargaining power of customers, bargaining power of suppliers and intensity of competitive rivalry.
When it comes to the threat of new entrants and the threat of substitute products or services, The Huffington Post is deploying a successful defensive strategy. With recent expansions into new countries, as well as the development of new ways to push content to users, the content provider is able to stay ahead of new entrants. In addition, The Huffington Post is an established brand with a large existing pool of customers, which increases its defensive strategy. Also, when AOL purchased The Huffington Post, AOL’s existing customers became members of the new Huffington Post Media Group, which enlarged the customer base and reach. However, because the Internet landscape changes rapidly, The Huffington Post must continue to be innovative in the delivery of their content.
As for the bargaining power of the customers and the bargaining power of suppliers, The Huffington Post holds the upper hand. The website content is free to users because the site’s revenue model is based on advertising. However, with the edition of the online magazine Huffington, additional revenue is brought in directly through the customer. In addition, because the site acts as an aggregator of content, the website is able to pick and choose its content suppliers. Additionally, many of the suppliers of original content are bloggers that chose to write for the site in order to garner more exposure.
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Therefore, The Huffington Post is able to pick and choose which content to accept from suppliers, rather than being forced to accept everything that is submitted to them. This allows the site to select content that the readers are looking for, which in turn boosts revenue and gives the news outlet more leverage against the competition. These two forces relate to the fifth competitive force, which is the intensity of competitive rivalry. Since the Huffington Post is able to be selective about what type of content it provides, in addition to its sharing partnerships with popular content sites, it is able to succeed in a relatively saturated online news market.
The Huffington Post is one the leaders of online publishing. While the site utilizes advertising and subscription as revenue generators, other sites can use one of four or a combination of the four revenue models for online publishers. One revenue model is to build a paywall. A pay wall forces readers to pay for access to online content. Without a subscription, readers only have access to limited posts and features on the website. One example of a successful paywall strategy is the one utilized by The New York Times. The Times implemented a paywall on their website and generated over $100,000 in revenue in a couple of days. One of the downfalls of this strategy is that it limits growth because its limits the ways in which the site can connect with new customers that are not willing to pay for subscriptions.
Another revenue model is to turn the online publishing brand into a company and take in investors. This involves creating a popular brand name and then opening the brand up to investors in order to create a company based on the brands existing fan base. An example of a successful execution of this strategy is Penelope Trunk, a blogger who has created four different startups and recently sold her brands to stakeholders in order to generate revenue for herself. This strategy can be extremely profitable but it does involve giving up the sole decision making power. When stakeholders are brought in, the direction of the company becomes dictated by them and their money.
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Another revenue model is to use an online publishing site as a incubator for other products or services. This model involves promoting a new website, product or service to an existing fan base. Once an online publishing site has become well-known, it can use its readership as leverage to generate income from new companies that are willing to pay for exposure to large existing fan base (Trunk, 2009).
An example of this revenue model would The Huffington Post, which utilizes advertisements as the main source of revenue.
The fourth revenue model is to go after talent acquisition. This involves the creator of the online publishing site to brand himself or herself as a leader in a certain industry in order to gain the attention of industry professionals that are willing to pay the online publisher in order to gain their expertise (Helft, 2011) A recent example of this was when Sam Lessin, an online developer sold his startup to Facebook. Facebook had no interest in his company; they only wanted Lessin to work for them because he was a well-known computer engineer (Helft, 2011).
This example demonstrates how the talent acquisition model works and how it can be lucrative for online publishers.
Overall, it’s clear that The Huffington Post has come a long way since its creation in 2005. Through the use of the Porter Five Force Analysis, as well as profitable revenue model for online publishers the website has become a staple in the online news industry. With recent expansions into countries like Japan and the United Kingdom, as well as the merger between The Huffington Post and AOL, it is clear that the company will continue to be a popular source of online content for readers across the world.
We are rapidly constructing a broad network infrastructure for moving information across national boundaries through internet, but there is much to be done before linguistic barriers can be surmounted as effectively with cross language translation web based online dictionary. Users seeking information from a digital library could benefit from the ability to query large collections once with a ...