Accounting & Investing Info for San Antonio A & M
Monday Feb 7 2011
AOL paid $315 million for the 2005 start up Huffington Post. Huffington is said to have made $65 M last year to AOL paid about 5 times gross earnings.
Was this a good deal for AOL, why or why not? HOw would you determine the multiplier to pay for this online letter? This occurs as most newspapers are having a hard time, note there is no print edition of Huffington.
It seems to be not a good deal, but $65 million dollars is not bad. But since Huffington Post is not a print newspaper, I feel that AOL made a reasonable deal back in 2005. I would add the revenue for the years 2006, 2007, 2008, 2009, and 2010 to see if it equal $315 million dollars that AOL paid, then if the revenue is more than $315 Millon Dollars then AOL made a good deal.
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Professor Elam 
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