The Financial Times reports that Buzzfeed fell short of its 2015 revenue target by 30% and has slashed its 2016 target by 50%. It took Guido 4 years to make a profit. No one ever said it was easy, overnight success generally takes years. Buzzfeed, the cool new kid on the block, has been going 9 years without making a profit. Nine years…
During those 9 years it has burned through hundreds of millions of dollars without paying investors a cent back. Smart people buy into the Buzzfeed concept, that it can reach millenials on their phones and on social networks with viral content as well as disguised advertising in the form of snarky content. They also have a conventional website famous for cat videos and lists. To make advertisers feel better about the online context of their paid content, Buzzfeed has branched out into serious content from serious journalists, with serious investigations and even some politics. It gives the Buzzfeed brand more journalistic credibility. Which goes comparatively unread.
Business Insider, Huffington Post and Vice News are all engaged in an online land grab, promising investors they will grab the global audience first and make profits later. Business Insider sold to Axel Springer for a cool $442 million last year. Outside the US it was not making a profit – though Insiders told Guido they were no longer losing money in London. Insider has a model that makes sense, aiming at time-pressed people interested in business. HuffPo aims to maximise traffic through aggregation and SEO optimisation, selling conventional display advertising – the AOL parent has a massive digital advertising sales operation. Vice is apparently to the millenial generation what MTV was to their parents and appears to be making money hand over fist.
The risk for Buzzfeed investors is that people no longer want the funny GIFs once they graduate, get a job and get busy. This leaves them with teenage “trash-traffic” of appeal only to generic advertisers who won’t pay high prices. Advertisers also worry, now that the novelty has worn off, that the advertorials don’t work or worse still, don’t fit their advertising goals.
Guido is enjoying the squirming of the offshore elite as much as anyone – the Icelandic premier is a corker, the Putin case study is great, the Bollywood stars who make their millions from millions of poor Indians will find it hard to survive the reputational hit. All very enjoyable.
It is worth mentioning that most of the UK’s big media organisations shelter assets and cash flows offshore. Top of the hypocrites in this respect is The Guardian. They put their assets in the Caymans, and they used a Luxembourg tax shell designed by PriceWaterhouseCoopers to funnel cash flows beyond the reach of HMRC. They previously blamed the difficult economic environment for committing the sins for which they condemn others. This isn’t just hypocrisy, this is an insult to us all. The Guardian’s entire heritage is one of tax dodging, the original founding Scott Trust was itself a tax dodge. They have year after year avoided tens of millions of taxes…
Other media organisations using offshore entities include the Huffington Post – whose journalists criticised Amazon for doing the same. The owners of the Mail, News UK and The Telegraph also have various offshore tax-efficient structures. Facebook, Google and Guido are not UK-owned though in the latter groups’ cases they have at least never claimed to be in favour of clamping down on tax havens. Guido’s point is that the likes of the Guardian should practice what they preach, hold all their assets in the UK and pay all the taxes which will consequently arise.
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HuffPo UK editor Stephen Hull squirms as he defends slave labour in an interview with Steve Hewlett:
“I love this question, because I’m proud to say that what we do is that we have 13,000 contributors in the UK, bloggers… we don’t pay them, but you know if I was paying someone to write something because I wanted it to get advertising pay, that’s not a real authentic way of presenting copy. So when somebody writes something for us, we know it’s real. We know they want to write it. It’s not been forced or paid for. I think that’s something to be proud of.”
Any writers whose hard, unpaid work has helped boost HuffPo’s traffic are welcome to get in touch…
UPDATE: A freelance journalist gets in touch, telling Guido they recently went to HuffPo offering them a small scoop. This was the reply they received:
“Your angle sounds v interesting. However, unfortunately we don’t commission any freelance content on HuffPost, so not sure how you’d like to proceed. You are welcome to write a blog for us (uncommissioned, unpaid) or you could supply quotes and info and I could credit you? Let me know if either of these work for you.”
AOL/HuffPo has $2.3 billion in revenue, yet they won’t pay journalists for stories…
Kate Middleton is ‘guest-editing’ HuffPo today, though once she has logged in she might want to go back and delete the site’s endless number of royally shameless clickbait articles about her “breasts”, “bottom”, “topless scandal” and “dress disaster”. Kate’s day-long reign has so far seen a 100% fall in the number of HuffPo posts featuring upskirt photos, under-age girls in bikinis, incest and photos of couples having sex. She would not be amused.
“Control is absolutely key to our coverage,” Arianna Huffington said last month as she launched Huffington Post Arabic, based in London and Istanbul. Well, judging by its initial output, it seems Arianna is struggling to control the Middle Eastern message.
One HuffPo Arabic author writes of the evils of selfies:
“[Selfies are] the diseases and the viruses of the Western world. I consider my article as an open letter to all the Islamic Ummah’s youth. It is a call to stop adopting such sick behaviors that come to destroy our traditions and the basics of human cultural identity.”
In another piece, the Egyptian government is critisised for allowing “a press conference for gays in the heart of Cairo”. And there was Guido thinking HuffPo were a bunch of wishy-washy liberals…
Alas not. HuffPo Arabic is being run by Wadah Khanfar, a former Al Jazeera journalist accused of “Islamist leanings“, and Anas Fouda, who has admitted he “became closer to the Muslim Brotherhood” when at university. Come back, Mehdi, all is forgiven!
UPDATE: Oh dear.
Bloggers from AOL’s stable of online media titles are heading for the exits following the announcement that Verizon will acquire AOL for $4.4 billion. Within hours of the deal coming to light yesterday, writers from AOL’s media wing, which includes Huffington Post, Engadget and TechCrunch, were firing off speculative job applications. Who wouldn’t want to work for a phone company?
Verizon has a less than stellar reputation when it comes to running media companies. Last year they launched a tech blog called SugarString that explicitly banned its reporters from covering certain topics. Worryingly for HuffPo writers, SugarString was quickly shuttered…
Replacing Mehdi at HuffPo is:
Following on from Sam McCrory’s move to the BBC this means struggling Dods have now lost their two most senior editorial staff in two months. Smart move by AOL, Mehdi was more of a polemicist and interviewer than a news man. Comment is cheap and over-supplied, news is in more demand. Waugh has a better nose for news than his predecessor. Congratulations… It’s still Waugh!
“I’m fed up with the hypocrisy of the free speech fundamentalists,” says Mehdi Hasan as he finally gives his two cents on the Paris terror attack. He asks: “Has your publication, for example, run cartoons mocking the Holocaust? No? How about caricatures of the 9/11 victims falling from the twin towers?[…]
How far will the Huffington Post stoop to attack a commercial rival? Today they have published a story promoting a video from Iranian state propaganda TV channel Press TV, best known for its anti-Semitic broadcasts, spinning for Ahmadinejad and promoting the country’s nuclear programme. […]
“Did you know that Abu Bakr al-Baghdadi, the leader of Isis, was trained by Mossad and the CIA?” asks Mehdi Hasan sarcastically in his HuffPo column this afternoon. It’s a good piece and worth reading, in it Mehdi argues that many Muslims around the world too often fall for loony conspiracy theories.[…]
The Huffington Post UK’s founding editor Carla Buzasi is out of the job. Media Guardian remain tactful:
“The move is a blow to HuffPo UK, which tried to keep Buzasi’s hankering for life beyond news sated by promoting her to lead global editorial strategy for lifestyle…”
Poor Mehdi seems to have been overlooked for the top job.[…]
Editor in Chief of Huffington Post UK Carla Buzasi is not impressed with Time magazine for putting a photo of a scantily-clad Beyonce on their front page:
In a change from side-boob and upskirt shots, Mehdi Hasan is frothing about ‘corporate welfare’ (geddit) over at the Huffington Post. He’s attacking the media for being complicit with large companies and banks:
“They are aided by their friends, allies and outriders in the right-wing media echo chamber, who have never had to endure the indignity of turning to payday lenders or food banks in order to survive.”
Which is odd given that Mehdi is aiding his corporate paymasters by censoring comments about the tax status of the Huffington Post’s parent company directly below his rant.[…]