Meet Arianna Huffington 2.0

The pundit and former politician has spun a web of bloggers into a site with outsized influence. Is this the future of the media business? Fortune's Richard Siklos reports.

By Richard Siklos, Fortune editor-at-large

(Fortune Magazine) -- Bobbing through a sea of air-kissing and neck-craning, Arianna Huffington is in her element. "Meet the new cooking columnist for the Huffington Post," she coos as she introduces me to Katie Lee Joel, a winsome young woman who writes about food, has served as host of Top Chef, and happens to be married to Billy Joel.

We are at a party that Rupert Murdoch and his wife, Wendi, are throwing in Manhattan for Jessica Seinfeld, author of a new cookbook, who is there with her husband, Jerry. Huffington works the room with ease, making introductions and connections with nearly everyone who crosses her path. "Do you know...?" "Have you met...?"

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Arianna Huffington
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HuffPo's Kenneth Lerer and Betsy Morgan in their Soho, New York office.

Soon enough she is in a tête-à-tête with the host, talking business. The media mogul asks her how the Huffington Post's web traffic is shaping up. "We are getting about three million visitors a month," Arianna replies in her familiar Zsa Zsa-like patois. Murdoch nods approvingly, then adds that his MySpace social-networking site is running at close to 70 million.

This, in a snapshot, is Arianna Huffington 2.0. Before the launch of the Huffington Post in 2005, she was an easily caricatured Greek-born pundit and author who seemed to know everyone and have an opinion about everything. Nowadays, thanks in large measure to the growing chatter about the Huffington Post, she is gaining not just media cred but the kind that comes with being one of those few people who supposedly "gets" the web.

Barry Diller's IAC (Charts, Fortune 500), one of the world's biggest Internet companies, sought out the Huffington Post to be its partner in launching a new comedy website. Huffington herself shared the cover of Newsweek for a special issue on "Women & Power." She even stood, Zelig-like, onstage in September at the Clinton Global Initiative with Google's (Charts, Fortune 500) Larry Page while the former President showered praise on them for their involvement in a foundation that hands out prizes for inventions and discoveries.

And whereas Arianna 1.0 was variously derided over the years as a striver, powermonger, political opportunist, and name dropper, her endless carousel of cocktail parties, dinners, speaking engagements, and conference panels -- indeed, even her visits to the doctor and college-scouting trips with one of her daughters -- have taken on new purpose as a chance to recruit writing talent like Mrs. Joel to the Huffington Post.

When the site first went live, the heavy betting was that it would quickly become a footnote in the sad annals of online ventures by celebrities -- anyone remember RodmanTV.com?

It was easy to underestimate her. First of all there was Huffington's complicated persona, coming off her failed 2003 run as an independent candidate for governor of California against Arnold Schwarzenegger that elicited almost no voter support.

Second, there was the notion of creating a collection of blogs by Huffington and her Hollywood pals at a time when many mainstream-media types still held blogging in roughly the same esteem that Oscar-winning thespians have for dinner theater on cruise ships.

But the site quickly gained attention as a place for left-leaning, button-pushing commentary, anchored most days by Huffington herself. Part of what clicked with the Huffington Post was how well suited its 57-year-old editor-in-chief was to the interactive medium, where the rules of engagement are clearly different from traditional media's. What critics derided as shameless social climbing in the offline world is a stupefying feat of celebrity crowd-sourcing and social networking at huffingtonpost.com.

Another surprise was the way Huffington and her two co-founders -- Kenny Lerer, 55, a former America Online executive, and Jonah Peretti, 33, a viral-media computer whiz -- cooked up, with relatively little money, an intriguing new business model for building communities around news content, something everyone from the big TV networks and newspapers to web giants like AOL and Yahoo (Charts, Fortune 500) are scrambling to do.

Unlike a conventional newspaper that devotes the majority of its resources to basic newsgathering, the Huffington Post instead devoted its scant editorial budget to hiring a few key editors, staff bloggers, and political reporters who post links to the day's stories and imbue the site with a dishy and slightly indignant sensibility, while giving the endless parade of invited bloggers co-star status on the Arianna Show. To date, some 1,600 bloggers have accepted Huffington's invitation to write. They are given a password to log into the site's publishing system and blog at will.

It's an ever-changing stew. On a given day John Cusack, Deepak Chopra, Nora Ephron, Bill Moyers, Al Franken, Bill Maher, Governor Bill Richardson, John Kerry, and scores of other politicos, actors, activists, and academics take to the digital pages of the Post with their views, causes, and beefs.