This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

What BuzzFeed's Valuation Means For Huffington Post

Stocks in this article: AOLYHOO

NEW YORK (TheStreet) -- AOL (AOL) is moving out of Yahoo!’s (YHOO) shadow, diversifying outside of its traditional role as a meeting place for Web users and making smart investments in the hottest online trends. Those big bets are now paying off.

Last week, it was the success of its automatic ad bidding platforms.

This week it is its ability to create and disseminate viral content online. BuzzFeed might be getting all the headlines for its approximate $850 million valuation (after Silicon Valley firm Andreessen Horowitz committed to $50 million in venture capital Monday), but AOL’s Huffington Post dominates as the English-language publisher with the largest presence on social media.

Read MoreAOL's Programmatic Play Pushes Second-Quarter Growth

In July, the site topped the list of English-language publishers with the most content on Facebook (FB), six times the number of articles Buzzfeed had shared. Of the articles posted on the social network, Huffington Post recorded a total 51 million interactions (impressions from 'likes' and comments), far higher than Buzzfeed’s 28.8 million, according to viral data tracker NewsWhip.

Huffington Post currently has 86 million monthly global desktop unique views (UVs), according to June comScore data. BuzzFeed generates around half the audience at approximately 45 million monthly global desktop UVs.

Right at the center of Huffington Post's success is its content, Jefferies analyst Brian Fitzgerald told TheStreet. "Huffington Post has a broad spectrum of content from political journalism all the way down to current entertainment/lifestyle subject matters," he said, while BuzzFeed's prime focus has been the latter.

After AOL purchased the Arianna Huffington-led Web site in 2011 for $315 million, the question was whether it had paid too much for a company only six years old with just 30 million unique users. Three years later, in a Jefferies research note published Tuesday, analysts question whether it is being undervalued in light of BuzzFeed's higher-than-expected appraisal.

According to Jefferies estimates, Huffington Post generated $360 million in annual revenue last year, contributing to a total $1.26 billion enterprise value. Huffington Post notes that AOL does not break out its figures individually. 

However, with analysts estimating current valuation quadruple what it was in 2011, its $315 million purchase price looks incredibly cheap and AOL's future bets look all the more bright.

--Written by Keris Alison Lahiff in New York.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,390.52 +195.10 1.13%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,630.7410 +64.6030 1.41%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs