How HuffPo became a star _ and why AOL wants it: Excellent analysis by AP

The Associates Press writes:
"The deal showcases the brutal environment for print newspaper companies in the iPad age. Unlike The New York Times, The Huffington Post doesn't have to pay for trucks to deliver the printed product. Nor does it have to pay hundreds of journalists to gather news the way big-city newspapers do. AOL is projecting a 30 percent profit margin for the site this year and expects to wring $20 million of cost savings by combining HuffPo with its own news sites. The combination will reach about 117 million unique visitors a month in the U.S., according to research firm comScore Inc.

"But by aggregating — or sponging, as some call it — other news providers' content, sites like The Huffington Post, critics say, are poisoning the news revenue model and threatening the Fourth Estate along the way. The Huffington Post only has about 100 staffers, 90 percent fewer than the New York Times. But HuffPo benefits from all the journalists working for mainstream outfits by posting their content and running ads next to it. In other words, the HuffPo's success hinges on monetizing content other publishers pay for."

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