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April 22, 2010, 10 a.m.

The Newsonomics of HuffPo’s pinball wizardry

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Arianna Huffington celebrates the fifth anniversary (May 9) of her eponymous website with a great present: breaking into the top 10 news sites in the U.S. In March’s Nielsen news standings, The Huffington Post moved into 10th place, propelled there by a 94-percent year-over-year increase in unique visitor growth. Just over 13 million unique visitors came to the site in March.

That’s quite an achievement, both for a site that young and for one that employs only about a hundred people. As mainstream media sites struggle for growth in 2010 and proliferating startups look for formulae that can give them traction, what can we learn from HuffPo?

Here are six points I think we can extract:

  • Don’t forget the intangibility of brand: HuffPo launched on the unlikely Greek accent of Arianna Huffington, political-wife-turned-populist-gadfly-turned-pundit-now-turned-magnate. Yet, in the final Bush years, her plainspoken opposition gave her a TV platform. Her venture backers smartly saw the value of that, and HuffPost has ridden this unlikely progressive brand through those Bush years, through the Obama wave, and now into the years of governing dangerously. Many newsies — old and new — rely on news conventions, the sexless “public affairs,” in trying to describe what they do. HuffPo has stood for a high-pitched way of thinking about the world — agree or disagree with it — and that’s made a fundamental difference.
  • Don’t overpay for content: HuffPo early on put a new twist on “columnists,” inviting in celebs as diverse as Michael Bloomberg and Shakira, and then many lesser, though authoritative, lights. The Newsonomics here, ably explained here by Wikipedia’s Jimmy Wales: “The best of the political bloggers are easily the equal of the opinion columnists at The New York Times. I don’t see the added value there and question whether a newspaper should be paying large sums of money for that anymore.” HuffPo has excelled at medium-to-higher quality “amateur” content with a next-to-nothing cost structure. Some news sites — Hearst comes first to mind — have really reached out to pro/am columnists, but most sites have moved too gingerly.
  • Embed yourself in the social graph: That graph of our all our digital interactions is now driving growth on the web; the fastest growing referrer to news sites and increasingly the center of our web lives. Many data points here, but here’s just the latest from Pew: 75 percent of online news consumers say they get news forwarded through email/posts on social sites, and 52 percent say they share links to news via social networks. HuffPo did a major partnership with Facebook, creating HuffPost Social News. Earlier this month, it moved to create substantial Twitter editions of two-thirds of its sections, apparently anticipating Twitter’s recently announced “Promoted Tweets” ad availabilities. CEO Eric Hippeau has made this compelling point about the nature of his site: “We’re one part social network, one part news content site.” How many traditional news sites think that way?
  • Niche, niche, niche: Everyone knew what the site was: a political news site, a bloggy, lefty Politico. Then the site started replicating itself — very much on the model of a newspaper; in fact, Arianna has called it an “Internet newspaper.” Topical sections on Tech, Business, Books, Health and Green. Local sections in four cities. A college section recently launched. Some are better than others, but all are inflected with the brand, a way of writing and presenting the news. The lesson here: in niching, give the topical content a strong and consistent voice.
  • Grow when others are cutting back: The site doubled its staff in 2009 — the year of the great recession — using new investment to move close to 100 employees.
  • Play pinball: Track HuffPo’s expansion — vertical, local, social and mobile (apps) — over five years, and you can see some pinball wizardry at play. Plainly, a site once totally associated with politics has become a convivial home for many people. The wizardry at work here means offering more and more like content to more and more like people; it’s a constant experimentation, but all in the direction of more. And all of that more, executed on the backbone of a good SEO strategy, creates the pinball effect. That’s how HuffPo has become a Top 10 site. The learning: Connect all the dots.

As in many things web, traffic hasn’t yet created that much of a business. Most estimates place HuffPo 2009 revenues in the $12-15 million range — meaning that it is monetizing its unique visitors and page views at something like a tenth of the rate of The New York Times, the largest newspaper-owned property in the top 10. What the traffic performance does do is give HuffPo the opportunity to play in the bigger ad leagues. But we can see it’s got a lot of work ahead on that.

POSTED     April 22, 2010, 10 a.m.
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