The Economic Insanity Is In Full Force - AOL Buys Huffington Post

This is another sign insanity has returned in full force.  Actually this reminds me very much of the AOL – Time Warner merger which was one of the last gasps of insanity in the year 2000 right before markets rejected the latest incarnation of economic stupidity.  

I like Arianna Huffington a lot and I sometimes link to the Huffington Post.  But let’s get real.  We have rigged economic markets that keeps tens of millions of Americans and their economic ideas from participating yet we have a financial and business industry willing to bless this deal? 

The Huffington Post is essentially a shell company relying generally on aggregation of news and stories reported by other sources and from free commentary provided by bloggers and people in the political community who have similar views to that of Arianna Huffington.  There is nothing wrong with any of that.  But AOL is paying ten times revenue, yes revenue, for a company that is basically a mirage.   The Huffington post has no substantial tangible value.   This is complete insanity.  Quite frankly, this is Ponzi economics at its best.  I don’t blame Arianna.  She is simply cashing the lottery ticket that AOL is handing her.   

The Huffington Post is pumping this acquisition as a merger of visions.  That sounds mighty familiar.  Sounds a lot like the mumbo jumbo of why companies with no tangible value were being pushed onto buyers in deals with upside down finances during the internet bubble.  Then as this Ponzi scheme collapsed, we found out visions don’t pay the bills. 

This is another example of economic nonsense that will more than likely never see any positive return.  And I do mean never.  Just like the AOL Time Warner merger.   The insanity is back in full force.