What does AOL get by shelling $315 million for Huffington Post?

AOL has agreed to spend $315 million on one of its biggest acquisition, news aggregator Huffington Post, adding another leaf to its portfolio of content which includes other names like TechCrunch and Engadget.

Web-based content gains mileage on the internet traffic that a news portal is able to garner. With Huffington Post in its kitty and Arianna Huffington crowned president and editor-in-chief of a newly-created Huffington Post Media Group, AoL will bring together all its assets like Engadget, TechCrunch and Patch under one umbrella. While Huffington becomes the top boss, AOL is sure to benefit in terms learning the art of creating low-cost online content.

Under its current CEO Tim Armstrong, AOL has gone on a buying spree adding prized possessions including top technology blogs TechCrunch and Engadget. AOL has taken a diversified approach to generating traffic by acquiring companies dedicated to specific portals like gaming and technology. Its push is to create quality content at cheaper prices. With Huffington Post, it gets a team of dedicated journalists to add quality to its content and also the essential tactics to drive down content production cost.

Since the focus is on numbers, Advertising Age has reported figures related to Huffington Post.

Huffington Post:

--24 million readers a month

--500 million page views a month

--$31 million in revenue

--88 editors and writers

--6,000 unpaid bloggers

--Generates 600 articles a day

AOL's ambition to become a major source of online content and entertainment and its roadmap to reach the spot and metrics that defined its strategy was recently leaked by Business Insider in a 58-page document titled The AOL Way: Content, Product, Media Engineering, and Revenue Management.

AOL's strategy:

--117 million unique visitors in US and 270 million globally

--Expects 55,000 pieces of content by April 2010

--Expects video content to increase from 4 percent of stories to 70 percent

--To increase page view per story from 1,512 to 7,000

--To reduce the cost of content from $99 per piece to $84 per piece

--Expects to increase SEO coverage to 95 percent of the content

Its strategy has received significant flak with reports ascribing the content farm tag to AOL. With Huffington Post in its foyer, AOL now has the process lined out in its metrics and Arianna's Huffington's Mida's touch to actually make their new equation of 1+1=11 a reality.