WHEN: TODAY, MONDAY, FEBRUARY 7TH AT 12:45PM ET
WHERE: CNBC'S "FAST MONEY HALFTIME REPORT"
Following is the unofficial transcript of a FIRST ON CNBC interview with AOL CEO Tim Armstrong & Huffington Post co-founder Arianna Huffington on CNBC's "Fast Money Halftime Report" today at 12:45PM ET.
Here is a link to the video of the interview on CNBC.com: http://www.cnbc.com/id/15840232?video=1784186712&play=1
SCOTT WAPNER: WELCOME BACK TO THE "FAST MONEY HALFTIME REPORT." ONE OF THE MOST TALKED ABOUT DEALS OF THE DAY, AOL BUYING NEWS BLOG SITE HUFFINGTON POST FOR $315 MILLION.EXPANDING ITS NEWS AND COMMUNITY PRESENCE ON THE WEB.WE'RE JOINED NOW IN A "FIRST ON CBNC" FROM AOL HEADQUARTERS BY AOL CEO TIM ARMSTRONG AND HUFFINGTON POST CO-FOUNDER, ARIANNA HUFFINGTON. THANKS FOR JOINING US THIS AFTERNOON. MR. ARMSTRONG, LET'S BEGIN WITH YOU, $300 MILLION FOR A COMPANY THAT'S EXPECTED TO GENERATE NORTH OF $50 MILLION.I'VE READ ANYTHING TODAY ON THE COMMENTARY OF THIS DEAL TO IT BEING TRANSFORMATIONAL TO SOME SAYING IT'S CRAZY.WOULD YOU AT LEAST BE WILLING TO ADMIT THAT IT'S RISKY?
TIM ARMSTRONG: I DON'T THINK THERE'S ANY RISK IN IT. I THINK THE FUTURE OF THE INTERNET IS GOING TO BE ABOUT CONTENT.I THINK THE HUFFINGTON POST IS ONE OF THE STRONGEST, MOST TRANSFORMATIONAL BRANDS ON THE INTERNET. AND IF YOU THINK ABOUT THE PRICING FOR THE DEAL, HOPEFULLY $10 MILLION OF EBIT THIS YEAR AND PROBABLY $20 MILLION OF SYNERGY. ON A TRADING BASIS, IT'S A TEN TIMES MULTIPLE, WHICH IS A FANTASTIC DEAL FOR OUR SHAREHOLDERS. THAT POINT OF IT, THE FINANCIAL SIDE, WE'RE VERY HAPPY ABOUT BUT WE'RE MORE HAPPY ABOUT WHO'S SITTING TO MY LEFT, ARIANNA HUFFINGTON. ONE OF THE BEST FEMALE ENTREPRENEURS IN THE WORLD. AND ONE OF THE BEST CONTENT PEOPLE IN THE WORLD.
WAPNER: WE'LL GET TO ARIANNA IN JUST A SECOND. I THINK IF THERE'S A CRITICISM OUT THERE TODAY OF SOME THINGS THAT I'VE READ IS WHAT DOES AOL REALLY STAND FOR? HERE YOU HAVE WHAT ESSENTIALLY IS A HODGEPODGE OF A BUNCH OF DIFFERENT BRANDS ALONG WITH THE DIAL-UP SERVICE. WHAT IS THE IDENTITY OF AOL AS IT STANDS TODAY?
ARMSTRONG: AOL IS PLANNING ON BECOMING THE LARGEST PREMIUM CONTENT COMPANY ON THE INTERNET AND THE NEXT AMERICAN MEDIA COMPANY THAT GOES GLOBAL. AND I THINK IF YOU LOOK AT OUR PROPERTIES, IT'S NOT DISSIMILAR TO SOMEBODY DISSIMILAR TO SOMEBODY LIKE DISNEY WHERE THERE IS AN UBER BRAND AND WE HAVE STRONG VERTICALS LIKE DISNEY HAS ESPN AND ABC, YOU ARE LOOKING AT THE NEXT ABC OR ESPN TO MY LEFT. AND SO INVESTORS MAY NOT SEE IT AS A COHESIVE FORMULATED STRATEGY BUT I WOULD ARGUE AGAINST THAT. I THINK IF YOU LOOK AT OUR INVESTORS, WE HAVE A PLATINUM GROUP OF INVESTORS WHO UNDERSTAND THE STRATEGY AND WE'RE GOING TO BE AGGRESSIVELY EXECUTING OUR CONTENT STRATEGY AND TODAY'S ANNOUNCEMENT IS A VERY BIG PIECE OF THAT.
WAPNER: LET ME TALK ABOUT AD SALES BECAUSE THERE WAS A DECLINE IN THE FOURTH QUARTER.ISN'T THERE SO MUCH RISK, FRANKLY, IN PUTTING NOT ONLY SO MUCH MONEY BUT SO MUCH FAITH IN SOMEONE LIKE MISS HUFFINGTON WHO, LET'S BE OBVIOUS HERE, HAS PRETTY OVERT AND DISTINCT POLITICAL VIEWS. AS IT IS, THE AD PIE IS ONLY SO BIG.THERE IS ONLY SO MUCH MONEY TO GO AROUND.YOU'VE GOT TO COMPETE WITH YAHOO! FACEBOOK, GOOGLE. HOW DOES ARIANNA HUFFINGTON'S POLITICAL VIEW COME INTO ALL OF THIS AS YOU ARE FIGHTING FOR AD DOLLARS?
ARMSTRONG: SO FIRST AND FOREMOST THAT'S ON OUR MIND. WE HAVE A 25-YEAR-OLD COMPANY WITH MEMBERS WHO HAVE BEEN WITH US FOR 25 YEARS. OUR POLITICAL VIEWPOINT IS BEYOND LEFT AND RIGHT WHICH IS ARIANNA'S TAG LINE AND WE BELIEVE IN THE FUTURE NOT JUST AT A GLOBAL AND NATIONAL LEVEL BUT A LOCAL LEVEL. POLITICS IS SOMETHING THAT'S MOVING BEYOND THE POLITICAL PARTIES AND YOU LOOK AT MAJOR ISSUES ACROSS THIS COUNTRY AND I'LL LET ARIANNA HIT ON IT IN ONE MINUTE BUT I WANT TO ZERO IN ON THE ADVERTISING MARKET. THE ADVERTISING MARKET RIGHT NOW IS POISED FOR TREMENDOUS GROWTH OVER THE NEXT FEW YEARS IN DIGITAL. IF YOU LOOK AT THE MAJOR AGENCIES, FOUR LARGEST HOLDING COMPANIES, THEY ARE TRYING TO MAKE DOUBLE-DIGIT INCREASES IN SPENDING TOWARDS THE INTERNET AND THE DIGITAL REALM. WE WILL OCCUPY THE LARGEST DIGITAL CONTENT SPACE ON THE INTERNET AND THE INTERNET TODAY IS A LOT ABOUT DISCOUNTED PRICING, COUPONING, INTRODUCING PEOPLE TO YOUR BRANDS WITH DISCOUNTS. WE ARE BUILDING NEXT GENERATION OF BRAND ADVERTISING WHICH IS IF YOU'RE A COCA-COLA OR GENERAL MOTORS OR A COMPANY LIKE THAT THAT SPENT 100 YEARS BUILDING YOUR BRAND, WE HAVE BRAND OFFERINGS ON THE INTERNET TODAY THAT ARE SINGULARLY THE BEST BRAND OFFERINGS AND WE'RE SCALING THOSE OUT DURING Q1 AND Q2 AND WILL BE ROLLING THOSE OUT WITH THE HUFFINGTON POST. SO I FEEL VERY STRONGLY IN OUR COMPETITIVE SET. WE HAVE A UNIQUE SELLING PROPOSITION IN THE MARKETPLACE AND WE'RE GOING TO DELIVER THE BEST CONTENT EXPERIENCES IN THE WORLD FOR CONSUMERS.
WAPNER: ARIANNA, YOU TOOK MOSTLY CASH IN THIS DEAL, DID THE HUFFINGTON POST. DID "THE HUFFINGTON POST" DO THAT BECAUSE THERE IS A LONG MEMORY OF AOL TIME WARNER AND THE LARGE PORTION OF STOCK THAT WENT INTO THAT DEAL AND THE OBVIOUS DISASTER THAT THAT MERGER PROVED TO BE?
ARIANNA HUFFINGTON: NO, NO NOT AT ALL. I ACTUALLY TOOK STOCK AS WELL --
WAPNER: YEAH, BUT SUCH A SMALL PORTION OF STOCK.
HUFFINGTON: WELL, 25%. 25% OF STOCK. AND I'M ABSOLUTELY CONFIDENT THAT THOSE WHO TOOK STOCK WILL DO BETTER THAN THOSE WHO TOOK CASH. AND THERE IS NO DOUBT THAT WHAT WE ARE BRINGING TOGETHER HERE IS ACTUALLY GOING TO SHOW HOW YOU CAN CREATE GREAT QUALITY JOURNALISM AND BE COST EFFECTIVE AT THE SAME TIME. THE WAY WE'VE DONE IT AT THE HUFFINGTON POST IS TO BRING TOGETHER ESTABLISHED EDITORS LIKE PETER GOODMAN AND TIM O'BRIEN AND HOWARD FEINMAN FROM "THE NEW YORK TIMES" AND "NEWSWEEK" AND BRING THEM TOGETHER WITH YOUNG GENERALLY STRAIGHT OUT OF COLLEGE AND COVER EVERYTHING. WE'VE DONE SOME GROUNDBREAKING BUSINESS COVERAGE WHICH WE WILL EXPAND HERE, INCREDIBLE POLITICAL COVERAGE THAT BRINGS TOGETHER ESTABLISHED EDITORS WITH REPORTERS AND CITIZEN JOURNALISTS .WE WANT TO DO A LOT MORE OF THAT IN TIME FOR THE 2012 ELECTIONS THROUGH PATCH.THAT'S ALREADY ESTABLISHED IN 800 TOWNS. WE WANT TO BE A CENTRAL PLACE FOR CAUSE MARKETING WHICH IS CENTRAL TO OUR DNA. IT IS SOMETHING THAT PATCH AND TEAM AND AOL GENERALLY ARE VERY COMMITTED TO AND SO IS THE HUFFINGTON POST.SO REALLY IF YOU LOOK AT THE WOMEN'S SPACE WHICH IS GOING TO BE A HUGE GROWTH AREA FOR US, WE'VE REALLY CARVED A GREAT PLACE HERE WHERE WOMEN ARE LOOKING TO -- HOW TO DO SUCCESS DIFFERENTLY WITH LESS STRESS. SO IN ALL THOSE AREAS, WE ARE ACTUALLY GOING TO BE AT THE LEADING EDGE OF PRODUCING CONTENT THAT LEADS TO ENGAGEMENT.
WAPNER: YOU'RE GOING TO BE IN CHARGE OF ALL OF THE CONTENT BUT HOW DO YOU INTEGRATE SO MANY DIFFERENT BRANDS?YOU'VE GOT THE HUFF POST NOW, MOVIE PHONE AND GADGET, MAP QUEST, AND TECH CRUNCH. HOW ARE ALL THOSE GOING TO MESH TOGETHER? NOW ALL THESE PEOPLE ARE GOING TO BE REPORTING TO YOU. HOW ARE THEY GOING TO FEEL ABOUT THAT?
HUFFINGTON: YOU KNOW WHAT? IF YOU LOOK AT "THE HUFFINGTON POST," YOU COULD SAY HOW DO YOU BRING TOGETHER STYLE AND COLLEGE AND FOOD AND POLITICS? THAT'S LIFE. WE ALL ARE INTERESTED IN MULTIPLE THINGS. AND OUR GOAL IS TO CATER TO ALL THOSE NEEDS. WE NOW HAVE 26 SECTIONS OF THE HUFFINGTON POST. I DON'T THINK ANYBODY HAS CALLED US A HODGE-PODGE. IT IS JUST A QUESTION OF HAVING CLEAR VOICES AND PROVIDING ENGAGEMENT. AS YOU KNOW, NEWS HAS BECOME INCREASINGLY SOCIAL. PEOPLE DON'T WANT JUST TO CONSUME IT, THEY WANT TO SHARE IT, THEY WANT TO COMMENT ON IT, AND THE HUFFINGTON POST HAS PROVIDED A GREAT CIVIL ENVIRONMENT IN WHICH TO DO THAT WHICH BOTH CONSUMERS AND ADVERTISERS LOVE.OUR COMMENTS ARE ALL PREMODERATED. 4 MILLION COMMENTS LAST MONTH. THAT'S WHAT EVERYBODY'S LOOKING FOR, A REAL VIBRANT ENGAGED AUDIENCE.
WAPNER: GUYS, IT IS GREAT TO TALK TO YOU. THANKS SO MUCH FOR SPENDING TIME WITH US FIRST ON CNBC AND OF COURSE ON THE "FAST MONEY HALFTIME REPORT." CONGRATS ON THE DEAL. FOR MORE ON THE INTERVIEW WITH TIM ARMSTRONG AND ARIANNA HUFFINGTON, GO TO FASTMONEY.CNBC.COM.
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