Huffington Post: Acquisition Bait, Now More Than Ever

It’s official: Betsy Morgan says she was indeed pushed out as the ineffectual CEO of the Huffington Post. But to what end? The new regime is downplaying profitability in favour of revenue growth — the ideal ramp for a sale.

HuffPo co-founder Ken Lerer tells the New York Observer that the new CEO, Eric Hippeau of HuffPo investor Softbank, “thinks this isn’t the time to be profitable-it’s the time to invest.” Investment is inevitable, since HuffPo has some $US25 million in fresh venture capital reserved strictly for growth (as Huffington told us Monday, “The $US25 million we raised from Oak has not been touched. It’s available for our next round of expansion”).

But why not finally turn profitable? In March 2008, more than a year ago, the New Yorker said the publication was “poised to break even.” Since then, money has poured in; HuffPo brags it has doubled revenue over the past year and a half. Profitability, then, must have been restrained by expenditures, reportedly a longtime problem at HuffPo. There’s been talking of trimming costs.

And yet Hippeau tells the Observer he’s “not here to fix” the publication, “I’m here to grow it… we’ll have deep partnerships with major players, which goes beyond content-sharing.” Maybe one of these “deep partnerships” will take the problem of making money as an independent business off HuffPo’s plate for good.

(Pic via Blip.tv’s new interview with Hippeau)