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Daily Briefing: RIP BuzzFeed News
Good morning! And welcome to Business Side.
In today’s briefing we cover:
The shutdown of BuzzFeed News
Layoffs at Insider
AI developments at Google
Plus other developments across the industry
Let’s get to it.
RIP BuzzFeed News
Last Thursday, we learned that BuzzFeed is shutting down its news division and laying off about 180 people, or 15% of its staff. BuzzFeed’s COO and CRO are also leaving the company.
In a staff memo, CEO Jonah Peretti took responsibility for the decision, saying that he was “slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium-free journalism purpose-built for social media.”
It’s a sad day for digital news that, for some, marks the end of an era. Reflecting on the shutdown, BuzzFeed News’ founding editor Ben Smith wrote about the two epochs he sees in digital media. The first began in the early 2000s and culminated in the early 2010s when publishers rode the “exploding social web.” The second era, which we’re in today, challenges publishers to “build direct connections with an audience” that’s overwhelmed by the social web.
One read is that BuzzFeed News didn’t adapt to this new era quickly enough. This is likely true – social media is a powerful drug. But it’s also not clear that BuzzFeed News was ever profitable. As far back as 2016, the company’s decision to create separate news and entertainment divisions spurred speculation about a potential spin off. In recent years, the company has gradually reduced its investment in news with a series of layoffs, buyouts, and product deprecations.
Without sustainable profit, BuzzFeed News appears to have survived in large part because it held the affection of the company’s CEO. In his memo, Jonah Peretti wrote, “I made the decision to overinvest in BuzzFeed News because I love their work and mission so much.”
In hindsight, BuzzFeed’s decision to go public in late 2021 sealed the fate of BuzzFeed News. A harrowing mix of investor pressure, missed earnings, and a plummeting stock price likely left Peretti with little choice. A mission, however lofty, only goes so far in the public markets.
Perhaps with more time, BuzzFeed News would have found a sustainable business model to support its mission. We’ll never know. For now, it should be celebrated for its ambitious work and the many talented journalists it helped develop. Going forward, it should serve as an inspiration, and a warning, to a new generation of news entrepreneurs.
Insider to lay off 10% of US-based staff. In explaining the decision, Insider President Barbara Peng cited “economic headwinds,” while Insider CEO Henry Blodget spoke about a “significant” decline in both ad dollars and the time people spend consuming news. The layoffs will not impact international staff, though the company left open the possibility of future cuts.
The News/Media Alliance releases AI principles. The trade association’s guidelines focus on intellectual property, calling for AI developers to ask for permission and fairly compensate publishers when using their content to train AI models. Stack Overflow and Reddit both recently indicated that they would charge AI companies for access to their content.
Google consolidates AI efforts. The company merged ($) its two main AI units into a single division called Google DeepMind. The tech giant is also planning to launch ($) new AI technology that will generate ad creative by remixing advertiser-submitted content and introduced a new Bard feature that lets users see a wider range of AI-generated drafts.
CNN launched ($) a new custom-built CMS.
Bloomberg announced six new shows with a focus on documentary and interview formats.
The Guardian is partnering with ad tech company Illuma to bring contextual advertising to their site.
A record 363 journalists were detained ($) in more than 30 countries last year.
A German magazine editor was fired ($) after running an AI-generated “interview” with former Formula One champion Michael Schumacher.
The International Fact-Checking Network released its 2022 State of the Fact-Checkers report; notably Meta provides 45% of funding to fact-checking organizations.
Twitter also dropped ($) the “Government-funded media” label from the accounts of NPR, BBC, and CBC.
Meta expects ($) 1% to 2% YoY employee growth going forward, a significant drop compared to recent years.
Flipboard is launching editorial desks to curate news on Mastodon.
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