If you live by Google and Facebook, you die by them. The loss of 1,000 mostly digital news jobs last week made that clear. The long death rattle of the newspaper industry is now being heard at digital news companies that only a few years ago were the shiny new stars of journalism.
News that the layoffs had commenced arrived on BuzzFeed’s hip morning show on Twitter. The commentary, like the show, was short. “It fucking sucks,” said one of the hosts, as the pink slips were beginning to be delivered near their set. BuzzFeed is shedding 15 percent of its 1,500-person staff, some 220 jobs. The same day, Verizon, the corporate overlord of HuffPost, announced big layoffs in its media division, including HuffPost journalists. The cuts will continue this week at BuzzFeed, which has already discharged its national-security team, its national desk, and its bureau in Spain. As if to emphasize that all were in the same boat, Gannett, venerable corporate parent of USA Today, laid off journalists at many of its regional papers across the country.
Of the affected institutions, BuzzFeed is the one I know best, from extensive reporting I did there for my new book, Merchants of Truth. BuzzFeed launched as a site catering to what its founder, Jonah Peretti, called the “bored at work” network, millennials who were glued to their News Feeds when the boss wasn’t around, sharing BuzzFeed’s adorable puppy pictures or answering its quizzes about 1980s celebrities. It moved into news in 2012 and aimed to compete with the old guard, The New York Times and The Washington Post. Its editor, Ben Smith, came from Politico.
The journalists who were laid off at BuzzFeed and HuffPost were different from those of the standard-issue Times or Post model, both generationally and in terms of approach. HuffPost’s new editor, Lydia Polgreen, who herself had come from the Times, aims to cover the news as it impacts real people, an approach that is refreshing given the unitary focus on politics and President Donald Trump that most news shops have had recently. And, as digital natives, they understood the power of the Web in the way others didn’t. Two BuzzFeed journalists were ferreting out “fake news” earlier than most news organizations, exposing teens in Macedonia who were making a fortune on advertising by promoting their fake news sites on Facebook. The journalism can be excellent: BuzzFeed was a finalist for a Pulitzer Prize for an investigation of the Russians who were behind 14 suspicious murders in Britain.
Peretti’s belief was that BuzzFeed couldn’t be a serious media player without a major commitment to serious journalism. He gave Smith the money he needed to compete and bring a younger audience to hard news. I viewed BuzzFeed as a genuine competitor when I was executive editor of The New York Times. And with the Trump administration, there cannot be too many investigative or national-security reporters. BuzzFeed’s news side had 20 journalists in its investigative unit alone.
In their heyday, places like HuffPost and BuzzFeed looked like they had figured out a sustainable business model by building audience scale and attracting lots of digital advertising. Old media envied them and resented their success. HuffPost rode the Google search wave, mainly by figuring out the digital science of search-engine optimization. BuzzFeed rode the social wave and attached itself to Facebook. Its snackable, shareable content was manna to advertisers.
Peretti is the thread that connects them. He was one of the founders of the Huffington Post and figured out how to make its stories and blogs, mostly written by unpaid authors and celebrities in Arianna Huffington’s Rolodex, rank at the very top of Google searches. At the Times, I was horrified every time one of our big scoops was virtually copied by Huffington and drew more eyeballs than our originals, courtesy of ranking higher on Google.
In 2011, Arianna sold the Huffington Post at the top of the market. It was acquired by AOL for $315 million (Verizon later acquired AOL, and with it, HuffPost). Arianna departed in 2016, having pocketed two acquisition windfalls. Peretti used some of his millions to launch BuzzFeed, which began life in a crummy, roach-infested office above a mah-jongg parlor in Chinatown. He wanted to apply what he had learned at the M.I.T. Media Lab about how information goes viral, and see if a Web site could thrive by employing the new Web science of virology.
I got to know Peretti in 2011 and invited him to appear with me onstage at a Times meeting of its top executives and editors. We were very far behind in using social media to distribute our stories and build audience (we used to use the term “readers.”) The Times had always been reluctant to give its stories away, worrying that it would anger subscribers if the journalism they paid for appeared free elsewhere on the Internet. Soon, though, the Times could not resist the lure of 2 billion users and provided news content for Facebook’s instant articles, video for Facebook Live, and encouraged its reporters to do live Facebook chats.
Meanwhile, BuzzFeed, riding along on the river of Facebook’s audience, continued to grow. By 2017, it had a $1.7 billion valuation—but that year it missed its revenue targets. In 2018 it expected to hit a $300 million target, but cutting bodies may have been required to reach that goal. Its high valuation makes it an unlikely acquisition prospect. A public offering was talked about but shelved.
Facebook’s News Feed, and the algorithms which underly it, are the environment in which BuzzFeed and companies like it thrive or whither. When Facebook pronounced itself “video first,” so did BuzzFeed, which received a $250 million investment from NBCUniversal to make video programming. Peretti moved to Los Angeles, rented out some massive warehouses, and built something called BuzzFeed Studios. I went out to see a big and expensive production studio, a mini–Paramount Pictures.
But Facebook is fickle. When it tweaked its almighty algorithm to decrease the appearance of news in the News Feed and prioritize friends and family, it hit news companies hard. Meanwhile, with Google, it was gobbling up 95 percent of new digital ads. That created the current crisis. For BuzzFeed, as for other digital publishers who had become dependent on Facebook traffic, things did not work out as expected. The “pivot to video” that so many digital media companies copied, has become, as one journalist called it, “the pivot to dust.” In January, Netflix canceled its BuzzFeed series, Follow This, which followed BuzzFeed journalists as they worked. Mic, another digital news operation with a young audience, shuttered itself a few months ago, shortly after its own full pivot to video. Closure came after Facebook canceled Mic’s program on Facebook Watch.
In the wake of all this turmoil, Peretti, too, has become a Facebook critic. At the Code Conference in Huntington Beach, California, he said, “The big question with Facebook is most of Facebook’s revenue is in News Feed, and that’s where they’ve not shared revenue.” Together, Facebook and Google have sucked up $95 billion of new digital ad revenue. Peretti has proposed merging with other digital companies, including Vox, Vice, and others, to force Facebook to share the wealth.
It’s possible that these new cuts are happening because BuzzFeed is slimming itself down in hopes of a sale. Smith had already talked to Peter Lattman of the Emerson Collective about a possible deal for BuzzFeed’s news operation, but it never came together. Last week, Recode reported that BuzzFeed might merge with Group Nine—digital publisher and producer of Thrillist, NowThis, and the Dodo—which is run by the son of BuzzFeed chairman Ken Lerer.
I’m not sure any of these places will exist independently in five years. In newspapers and on the Web, only the big, and the essential, will survive. The New York Times, The Washington Post, and The Wall Street Journal are certain to survive. They are our irreplaceable news providers. But the shrinking of BuzzFeed and Huffpost, the continuing decimation of the dead-tree brigades, and associated scandals of fake news, loss of privacy, and rabid polarization, have made clear that the current media regime is in crisis, to which attention must be paid. How much bigger will Google and Facebook be in five years? The word “anti-trust,” is beginning to circulate in Washington. We’ll see.