BuzzFeed co-founder and CEO Jonah Peretti. Bennett Raglin/Getty Images for BuzzFeed Inc.
BuzzFeed (BZFD)’s content and advertising revenue fell sharply in the last three months of 2023 but managed to turn a slim profit of $3.5 million, the company said in its 2023 fourth-quarter and full-year earnings report today (March 25). Quarterly revenue came at $75.7 million, down 26 percent from the year prior. Full-year revenue fell just as much to $252.7 million.
One bright spot is that time spent by BuzzFeed’s audience on its media products grew 3 percent in 2023 to 306 million hours. However, time spent on BuzzFeed content on its third-party platforms declined by 32 percent last year. All the earnings numbers exclude the pop culture media brand Complex, which BuzzFeed sold in February and was classified as “held for sale” in the December report.
Almost a year ago, BuzzFeed shuttered its newsroom, BuzzFeed News, and let go all 180 employees as a result. The media company’s co-founder and CEO Jonah Peretti said he’d over-invested in BuzzFeed’s news brand trying to keep it afloat to no success. Since the decision, Peretti has spoken about shifting the company’s focus to content creators and artificial intelligence (A.I.) instead. During the earnings call, he said A.I. will first impact the programmatic and affiliate lines of revenue for the company, but also shared some of his vision for future uses of the technology in content creation.
“Our teams are starting to create content that feels more alive that has intelligence embedded in it that can interact with people that can personalize the experience for different people,” Peretti said on a call with analysts today.” And all of that is the very beginnings of what I think is the new medium and for content companies, particularly digital media content companies like BuzzFeed that is going to be a huge driver of future growth as that new medium starts to emerge.”
At the end of 2023, the struggling digital media company had $36 million in cash and $128 million in debt, partly stemming from its $300 million acquisition of Complex 2021. At the time of the acquisition, BuzzFeed took out a $150 million loan from several hedge funds that’s due this year. On the earnings call, CFO Matt Omer said $31 million of that loan is still outstanding. “The unsecured lenders do have an option to call the debt in December this year,” Omer said. “However we expect that we’ll be able to work with them in advance of the date of the call option.”
BuzzFeed sold Complex for $109 million in February. Peretti said that the offload would help BuzzFeed invest more into its remaining brands, including HuffPost, which is now the company’s only news offering. He also said the sale would aid BuzzFeed’s A.I. innovation goals.
BuzzFeed has also gone through some leadership changes in the last few months. The company’s chief financial officer Felicia DellaFortuna left in November to take on the same role at Enthusiast Gaming. Two months later, in January, its president Marcela Martin resigned to pursue other opportunities. DellaFortuna’s role was filled immediately by Omer, who was formerly finance and treasurer chief, while Martin’s was absorbed by other executives in the company.
Ben Shirken (l.) and Reggie Watts at this year’s 7×7. Photo by Owley Studios, Courtesy of Rhizome.
The intersection of art and technology gets a lot of press these days. In any given headline, it might be the “next frontier.” Or where cultural innovation happens. On some days, it’s spawning new job titles (e.g., curator of digital initiatives). And it always feels bright and shiny and optimistic and most importantly, new, even though artists have been experimenting with new technologies since the dawn of technology itself.
And therein lies the challenge one faces when considering what exactly is happening at this much-publicized intersection. On one hand, the phrase is applied, seemingly broadly, to everything from NFTs and the ever-morphing works of Refik Anadol to the kinds of immersive installations pioneered by Sandro Kereselidze’s Artechouse. On the other, what reportedly exists at the intersection of art and technology seems strangely circumscribed. There’s computer-generated art and art inspired by technology at these crossroads but very little science.
Or to put it another way, it seems there’s a lot more digital art being created at the intersection of the arts and technology than there are radical pairings of art and science. It may come down to people simply being more open to art borrowing from science and engineering than the reverse, even though there are plenty of notable examples of art inspiring scientific discovery. Niels Bohr in his development of the non-intuitive complementarity principle of quantum mechanics, for example, drew inspiration from Jean Metzinger’s cubist works.
Claims that the dividing line between science and art is artificial come off as hyperbolic, but both scientists and artists are dreamers who channel their creative energies into untangling the world’s mysteries and building new things. It’s logical to consider what the intersection of art and technology could look like if the focus was on deep collaboration instead of just tapping into one or the other as a source of inspiration.
Modeling a stronger synergy of art and science
On a Saturday in late January, scientists, engineers, artists and the curious gathered at the New Museum in New York City for the relaunch of Seven on Seven (7×7), an event born out of a 2010 hackathon that paired seven engineers with seven artists to demonstrate what could happen when they worked together. The lineup of past participants is a fascinating who’s who of art and tech: Tumblr founder David Karp, Internet entrepreneur Jonah Peretti and Aza Raskin of the Center for Humane Technology… new media artist Tabita Rezaire, moving image artist Hito Steyerl and performance and installation artist Martine Syms. In 2015, Ai Weiwei collaborated with the hacker Jacob Appelbaum. This year, Boston Dynamics’ Spot took to the stage with dancer Mor Mendel as part of a collaboration between Boston Dynamics Director of Human-Robot Interaction David Robert and artist Miriam Simun with Hannah Rossi.
Scientist–artist collaboration can take many forms: art-based communication can make science more accessible… new technologies become mediums in the hands of artists. What’s less common is what one Eos article calls “ArtScience,” which involves “artists and scientists working together in transdisciplinary ways to ask questions, design experiments and formulate knowledge.” 7×7, which is organized by the born-digital art and culture organization Rhizome, puts ArtScience on display by design. According to Xinran Yuan, this year’s producer and co-curator, it’s as important for the public to see collaboration between artists and scientists in action as it is to see the final output.
Xin Liu, Christina Agapakis and Joshua Dunn. Photo by Owley Studios, Courtesy of Rhizome.
That output was fascinating and surprisingly moving—Ginkgo Bioworks Head of Creative Christina Agapakis and artist Xin Liu’s yeast that lactates stood out—though I personally would have liked each duo’s presentations to be longer. Other 2024 7×7 participants included Replika AI CEO and Founder Eugenia Kuyda with artist and filmmaker Lynn Hershman Leeson; Nym Technologies CEO and Co-Founder Harry Halpin with artist Tomás Saraceno; Runway CEO and Co-Founder Cristóbal Valenzuela with comedian, writer, and actor Ana Fabrega; and engineer and entrepreneur Alan Steremberg with artist Rindon Johnson; and quantum physicist Dr. Stephon Alexander working with comedian, artist and musician Reggie Watts.
The focus of this year’s event was A.I.—specifically, the role it might play in our lives moving forward. It’s a blisteringly hot topic in the art world, given the emergence of tools that many artists argue are, at best, plagiarism machines and, at worst, livelihood killers.
“I’m glad that I’m alive right now at this really precarious time in human history and to be involved with A.I.,” Watts said at the end of an engaging and pleasantly optimistic talk on the potential of artificial intelligence in not only music but also improvisational creation. He was, however, pragmatic about the role artists need to play in the development of the technology. “I think it’s important for artists and technologists, but especially artists, to get ahead of the curve… even if you arrive at ‘this isn’t for me,’ be there at the table to have an opinion so it can be steered in a direction that’s most useful.”
Simun also feels it’s important to consider the question of what our future with A.I. will look like. “A question I asked during my performance is: What would happen if we defined intelligence less on how well someone/something knows, and rather on how well they react to unexpected, ambiguous, and uncertain situations?” she told Observer. “If this was the metric by which we defined intelligence, how might we build our robots and our A.I. differently?”
Dancer Mor Mendel with Boston Dynamics’ Spot piloted by Hannah Rossi. Photo by Owley Studios, Courtesy of Rhizome.
What scientists gain by working with artists
We’re culturally comfortable with art informed by science but less so by science informed by art—and that means we may be missing out on opportunities for innovation. Matthias C. Rillig, professor of ecology at Freie Universität Berlin, has considered the question in his own lab, which has an established artist-in-residency program, and among the many benefits of art-technology he has identified, idea generation stands out. “In conversations with the artist, unusual terms or connections appear,” he wrote last year. “One recent example of this was the term ‘soundscape stewardship’ that occurred in a conversation with Marcus Maeder,” which led to a paper in Science.
Observer spoke with David Robert shortly after 7×7 about why Boston Dynamics collaborates with artists. “Putting the robot in other contexts, besides what it’s doing for its ‘job’ to earn its keep helps us figure out what’s possible,” he said. Working on projects with artists, he explained, can help engineers understand not only whether people like or don’t like a robot but also what aspects they like or dislike, which can suggest avenues for improvement.
On the other hand, he added, “people project on them all the time and that’s a hard thing to design around.” Boston Dynamics has arguably done a top-notch job of getting people excited about robots, and it this point, it’s hard not to anthropomorphize Spot, which is bright yellow, moves like a happy dog and can be outfitted with what is functionally an arm but makes the robot look something like a friendly apatosaurus. It’s also currently painting with artist Agnieszka Pilat at this year’s National Gallery of Victoria (NGV) Triennial and has danced with BTS, walked the Coperni runway during Paris Fashion Week and given many kids and adults their first view of a real robot in action at Boston’s Museum of Science.
On the other hand, there’s still a ways to go—even with the maximum encutification of robots (see, for example, the University of Manitoba’s Picassnake), people make jokes about killbots and the coming robot apocalypse. “It totally makes sense, given all the narratives that we’ve grown up with,” Robert said. “Most people haven’t had a direct experience with a robot.”
The arts can change that. Simun’s 7×7 piece, as danced to the music of Igor Tkachenko and DJ Dede, offered an alternative to the imaginary robots we grew up with. “I hope the performance I created enabled the audience to gain a new and different perspective on the adoption of robots in our daily lives,” she said. “How are these robots being programmed to behave? To interact with us? To interact with their surroundings? … What kind of relationships with machines do we want, what will we get and what can we dream of?”
In the end, the answer to those questions will be determined by the types of dreamers who took the stage at the New Museum—those for whom art is more than science’s ambassador and technology isn’t just another artist’s tool.
During the last years of my run at The New York Times, it seemed possible that digital news start-ups, like Vice and BuzzFeed, could eclipse old, legacy news organizations like us. The Gray Lady was looking every bit her age and she was stumbling in the age of social media. From its origins as punk magazine in Montreal, Vice, with a slate of YouTube channels, suddenly had a production deal with HBO, operated at least one cable channel, and was winning Peabodys for news. Its valuation at one point was touted as being close to $6 billion. BuzzFeed was building a first-class investigative reporting unit on the back of its usual fare—exploding watermelons and viral sensations like “What Colors Are This Dress?” Both companies had big and devoted younger audiences, manna for advertisers. Out of the blue, these digital newcomers to news were threatening to eat our lunch.
Reversals of fortune are nothing unusual in the news business. But in the last few weeks it’s been gobsmacking to see Vice facing bankruptcy and BuzzFeed shuttering its news division. The Times, meanwhile, hit its goal of 10 million paying subscribers a year ago and aims to have 15 million by the end of 2027—more than enough to sustain its large news-gathering operations. It wasn’t that long ago that The Atlantic (in 2009), predicted that it would be the Times that would soon go bankrupt.
What happened?
It turned out that advertising was a bad bet. With the change of an algorithm, Facebook and Google slashed Vice and BuzzFeed’s massive audiences and hoovered up the bulk of digital advertising. Without huge traffic numbers, advertisers turned away and would no longer shell out millions for the bespoke brand advertising that was the lifeblood of Vice and BuzzFeed. Their young, hip followers were not willing to pay for their periodic scoops. News gathering turned out to be far more expensive than Shane Smith and Jonah Peretti, cofounders of Vice and BuzzFeed respectively, bargained for. (Howell Raines, the former executive editor of The New York Times, often said that if the Times went away, no one could ever rebuild it.)
The depth and breadth of the Times news report remains singular in quality, and reader revenue is now the cornerstone of the company’s financial security. Vice and BuzzFeed never had that secure base and without it they wobbled. They had taken big money from investors: 21st Century Fox put $70 million into Vice, with James Murdoch later buying a minority stake; NBCUniversal pumped $400 million into BuzzFeed. It’s almost unbelievable that Disney once considered acquiring eachof them. Bankruptcy may be the only option for Vice because no good bidders have emerged for a takeover. BuzzFeed’s stock, issued during a failed IPO, is virtually worthless.
But fickle economic winds do not give the full picture.
Despite being initially thrown off course during the digital transition, the Times had the confidence and will to stick to its core strength—the news—even during years when the company was saddled with heavy debt and shareholder rebellions were brewing. It never succumbed to Wall Street’s short-term demands or made crippling cuts to its newsroom. The Times remained stubbornly faithful to its news report and expanded globally. Its board remained faithful to the Sulzberger family that has owned the Times since 1896.
In hindsight, all this may look like a no-brainer, but during the roughest patches of the digital transition and the financial crisis, everyone on the inside had their doubts. I had a ringside seat as managing editor and executive editor of the Times. I led the merger of what had been separate and duplicative digital and print newsrooms, which the paper’s culture resisted. We were still running from behind in 2012 when I asked Arthur Gregg Sulzberger, then a talented reporter and editor, to form an Innovation Committee. The committee’s first mandate was to develop a suite of new products that would generate quick, new revenue. But after a few months, Sulzberger, now publisher of the Times and chairman of the New York Times Company, asked me to change the committee’s focus. “We need to grow from the core,” he told me, meaning our future would hinge on building from our core strength, the news report. We would secure the Times’ future by growing digital subscriptions and leveraging our strengths in areas like cooking (the Times owned thousands of fabulous recipes) and games (like its venerable crossword puzzle).
Neither Vice nor BuzzFeed could have executed this kind of strategy. Vice’s core was always sex, drugs, and rock and roll, and even as it branched into video, dispatching journalists to war zones and global hot spots, its most popular shows were series like F*ck, That’s Delicious, hosted by Action Bronson, the rapper and road-food gourmand. BuzzFeed’s core was its listicles, quizzes, and light celebrity news, popular but not likely to draw the paying customers needed for attracting and retaining great journalists. Building serious journalism muscles, meanwhile, was prohibitively expensive. So was retaining talent. The Times would eventually poach a number of BuzzFeed journalists, along with talent from upstarts like Vox.
The lesson in all this isn’t that legacy news organizations were destined to win (most didn’t) or that digital newcomers failed precisely because they were new. Some digital news organizations, like Politico, are successes and are profitable. Like the Times, Politico grew from a strong core. It covers politics and policy in a more granular way than anyone. Political junkies couldn’t live without it; companies with a vested interest in legislation would pay handsomely for its policy-focused Pro subscriptions. Paid conferences and other live events are logical and profitable extensions. Meanwhile, Talking Points Memo, created and run by Josh Marshall, has sustained itself since 2000 as a smart, original political site.
ProPublica, a nonprofit, has a solid core of investigative journalism that has sustained growth and won Pulitzers. There are a group of local nonprofits, like the Texas Tribune and Mississippi Today, that produce high-quality journalism, have an expanding base of donors and readers, and are beginning to fill the vacuum created by the closures of so many local newspapers. And Substack, a platform that hosts writers across the ideological spectrum who are creating subscription-based newsletters, has emerged as another potential destination for quality journalism online. And there are other interesting experiments in news rising out of the ashes.
No one should be dancing on the graves of Vice or BuzzFeed News. Competition makes everyone, including the Times, better. Journalism, a bedrock of democracy, thrives when different voices and informed audiences make themselves heard. With abysmal public trust numbers, everyone working in news is on shaky ground. Seeing that landscape shrink even further is distressing for journalists—and the public they serve.
Maybe I should have waited a week to interview Ben Smith. It was Friday, April 14, when I drove out to Smith’s place in Brooklyn, where he lives in a neighborhood that feels like you’re in some leafy suburb, full of picturesque Victorian homes. I’d schlepped out there to gab with Smith about his new book, Traffic,out now from Penguin Press, in which his former boss Jonah Peretti lands at the center of the narrative. (Nick Denton too, but more on that later.)
In the book, a postmortem of the mid-aughts digital-media revolution, we follow Peretti from his origins as a Huffington Post cofounder famous for a viral 2001 stunt-email to Nike, to his rise at BuzzFeed as one of the towering CEOs of the digital age. BuzzFeed is where Smith worked as Peretti’s editor in chief for eight years. Together, they built BuzzFeed News from the ground up and transformed it into a Pulitzer Prize–winning brand that became a talent farm for legacy institutions like The New York Times, which, case in point, hired Smith as its media columnist in 2020.
So we were sitting on Smith’s porch talking about BuzzFeed, and of course neither of us knew that, in another six days, BuzzFeed News would be a goner, the latest in a series of grim cost-cutting measures at Peretti’s 17-year-old company, which is struggling with macroeconomic pressures, the shifting content-distribution landscape, and the ongoing fallout from a disastrous IPO. Still, one of my inquiries turned out to be prescient.
A few weeks earlier, I’d gotten an email from Jill Abramson, the former Times executive editor who’d made BuzzFeed a major character in her own book several years back. Before heading off to Brooklyn, I texted Abramson and asked if I could read Smith her email and get his response. She said sure:
Is it because we are all charmed by Peretti, that the scandalous swindle that was his long-awaited IPO hasn’t been truly investigated? Key questions: How much dough did he make on the deal? How much did Ben Smith make on his stock? One viral Nike chain of emails many years ago has turned into an epic mess. Was Peretti’s ‘genius’ a complete chimera all along?
“I mean, if she’s saying the stock is at a dollar,” said Smith, “that’s exactly true.” He picked up his phone to double-check. “96 cents.” He also declined to quantify the return on his BuzzFeed equity: “I do not share the millennial compulsion to disclose your personal income.”
And the part about whether Peretti simply had us fooled this whole time?
“No, Jonah actually is a genius,” Smith countered. “Like, I think he saw around the corner, and saw social media, and saw these changes coming, but overestimated the degree to which he could kind of channel them, or control them. I always felt like I was working with somebody who could kind of see the future a bit. But he’d also never run a news organization. And so, often he would be able to say, ‘Hey, here’s what the world’s gonna be like in five years,’ which is an incredible insight. And I’d be like, ‘Okay, what do we do right now?’ He’d be like, ‘I don’t know, we gotta figure it out.’ But he really could see around corners.”
The following week, as Peretti’s announcement circulated far and wide, Smith would end up elaborating on these thoughts in a BuzzFeed News requiem published by his new digital media organization, Semafor, cofounded last year with ex-Bloomberg honcho Justin Smith.
“The end of BuzzFeed News,” Smith wrote, “signals a vast shift in digital media that those of us who live inside it are feeling intensely right now, the end of one era and the beginning of another. Peretti had built BuzzFeed into a traffic juggernaut by being among the first to see the rising social web. But BuzzFeed never found a new path when that trend turned against us—when consumers found their Facebook feeds toxic, not delightful; when platforms decided news was poison; and when Facebook, Twitter, and the rest simply stopped distributing links to websites…. Those of us lucky enough to be building from scratch in this new moment have to realize that the old way of thinking about news—based in text on the World Wide Web and distributed primarily on social media—has passed. But the demand to understand what’s happening in the world hasn’t gone away.”
Back on Smith’s porch, I picked his brain on other topics that have lately bewitched the media commentariat. AI in newsrooms?
“These things are language tools and we should use them to the degree that they’re valuable. I’ve found ChatGPT is really good at copyediting, and I don’t really see a problem with asking it to find typos. We’re not using it to write articles or anything like that. To me the most interesting use cases are in video, where lots of kinds of animation are very, very technical and very, very expensive, and there’s no way a newsroom of our size, or probably yours, could produce an animated mini documentary that costs a hundred thousand dollars.”
While I receded into a corner, alternately spaced out and laughing hysterically, and while Steinberg begged, Peretti grew even more abstracted than usual. He conducted a kind of Socratic dialogue with Steinberg in which he seemed at times to be talking to himself. He asked why Steinberg really wanted to do the deal, and Steinberg scrambled to give whatever answer would push Peretti toward yes. You just want money, right? Yes, Steinberg said. But is it really money you want? Or is it status? You don’t just want a house—you want it in the right part of the Hamptons, right? Sure, yes, status. Steinberg tried to lead Peretti back toward the wisdom of the deal—but Peretti seemed to be exploring his own motives, wondering what he actually wanted as he towered over Steinberg, laughing. Peretti didn’t seem to care about money, and he had a kind of reverse snobbery about the status money would buy. He didn’t even like the theme parks, Peretti told his appalled deputy. Steinberg was crushed and furious at me and at Frank; he believed, probably rightly, that if the three of us had been unified, we could have brought Peretti along. Steinberg and I both stumbled to bed, convinced Peretti would turn the deal down.
Back in New York, when the details came in, it became clear that this was an offer that Peretti, almost, couldn’t refuse. Disney was the most admired media company in the world, with a record of well-managed acquisitions like Marvel and Pixar. The price on offer was $450 million with the potential of earning $200 million more, an extraordinary sum for a company that had priced itself at less than half that just nine months earlier, and whose connection to Disney—a company obsessively protective of its image and its wholesome brands—was just a series of posts like “21 Completely Bizarre Moments in Disney History” (number five: “When Donald Duck promoted condoms during WWII”). Iger was persuasive. Peretti, Steinberg, and Lerer met nightly in the latter’s Upper West Side living room, and Lerer heard them both make their cases—Steinberg’s to sell, Peretti’s about the risks of being stifled by Disney and the potential upside he still saw in the company’s independence. Lerer knew Peretti would bridle at being pushed too hard, so he tried to nudge his protégé toward saying yes. The deal really was, by any normal standard, a no-brainer. On October 29, Peretti and Lerer flew back to Los Angeles, this time staying in Lerer’s preferred hotel, the Chateau Marmont. At nine the next morning, they met Iger and Mayer to go back over the details we’d discussed in the same building five days earlier. Then they all shook hands, and at least some of the men left the room thinking the deal was done. And then, on the flight back, Peretti turned to his seatmate: He didn’t think he could do it. Lerer, incredulous and quietly furious, told Peretti to call Iger and end the talks that day.
Peretti thought it would be more honorable to call it off in person, and so he instead called Iger to say that he wasn’t committed and he’d like to meet again—and suggested they talk after Peretti’s planned speech to Disney’s management retreat in Orlando 12 days later. Peretti was still feeling his old partner Lerer’s anger when he traveled to Disney World in Orlando on November 13 to speak to the company. The event was, for some 250 Disney higher-ups—the people who get to skip the lines at the theme parks—a nearly sacred gathering, running Thursday to Sunday at the sumptuous Grand Floridian Resort. Iger’s smooth public persona dominated the gathering. Executives worked out at 4 a.m. in hopes of running into him at the gym and, if they didn’t see him, returned at 6 a.m. They were the people who ran theme parks in Asia and cruise lines in Europe, and sold content in Latin America and Australia. They signed up for essentially mandatory and strangely competitive sporting events like softball. When Peretti looked down at them from the stage in the grand ballroom, he saw people dressed like their boss, strenuously casual in shorts and collared T-shirts, ready to pretend to be relaxed.
As they gathered, Mayer mentioned to Sherwood that Peretti had asked to meet privately after the speech, shooting his colleague a quizzical look that said “weird guy.” But if that was how he wanted the signing ceremony to go, that was fine. As they watched Peretti deliver his speech, trepidation grew for the executives who had worked on the deal. While Iger had staged Peretti’s speech in a marquee slot to welcome him to the family, the BuzzFeed founder didn’t seem to have prepared with any special care. There were no particular references to Disney, to his audience, his future colleagues. Those who had watched his speeches on YouTube recognized recycled jokes—his yarns about the Nike email and Black People Love Us! and his slides of corgis. As Peretti delivered one of his standard, edgy monologues—he liked to ask whether Mormons were better than Jews and explain that the real difference was about the quality of their distribution networks—an HR executive blanched and told the person sitting next to her that they might have a problem.
Peretti knew he could make himself, his investors, and many of the people who worked for him rich. He knew that the decision was still his to make, and while he was leaning against accepting Disney’s offer, he took the stage without quite having decided. But the reception of his speech confirmed his decision. Peretti had never gotten fewer laughs in his life. He had a vision of himself having to explain the internet to these suits for the rest of his career while they stared blankly back at him and missed his jokes. The thing he had valued from the start when he built a company in his own image was freedom—his own and others’, sometimes to a fault. Peretti couldn’t see himself as an officer on this tight ship. He thought of something his old friend and investor Chris Dixon once said to him: Do you know how many lame rich guys there are, and how few people who really build something? Peretti just couldn’t do it. He walked offstage and into a room with Iger and Mayer. There, he told them apologetically that his heart wasn’t in it. The deal was off. There had been a car ready to take him to celebrate; Peretti took it to the airport.
Iger, who could blow up and regain his cool within seconds, was furious that Peretti had walked away from the deal—and equally puzzled that Peretti had accepted the speaking invitation first.
“Fuck him, he loses, that company will never be worth what it would have been worth with us,” he said to another executive. But there was no looking back. Four months later, Disney announced it would buy Maker Studios, which helped YouTube stars like the gamer PewDiePie sell advertising, for roughly the same $500 million it had considered spending on BuzzFeed.
For Lerer, Peretti’s theatrical decision marked the first break with his protégé. Steinberg was heartbroken. He thought Peretti was out of his mind and realized simultaneously that BuzzFeed was Peretti’s company. The next thing Steinberg did, he vowed, would be entirely his own. He started racking up appearances on CNBC, studying how business news got made. Frank and I were relieved by Peretti’s decision, which meant we could go back to making videos and breaking news. We fully believed that the winds of history were at our backs, and that we’d look down at the pittance Disney offered us one day and laugh. And Frank and I weren’t the only ones who admired Peretti’s balls. In Silicon Valley, that self-effacing boldness and egotism were catnip. And the charts of traffic and revenue pointed ever upward. Facebook’s Mark Zuckerberg, legendarily, had turned down a $1 billion offer from Yahoo! in 2006, defying many of his advisers. Peretti could now go and tell his Disney story to the same people, show off his traffic, take their money, and keep growing.
Peretti’s decision didn’t look like a mistake at first. BuzzFeed and its generation of media—Gawker, Vice, Vox—kept growing, playing central roles in the decade’s culture and news. Even as their revenue numbers began to miss their targets, the growth fueled by Facebook and the sheer sense of destiny kept the hot financial markets open to raise more money, in retrospect, than they’d be worth.
As their businesses weakened and their brands aged, they rode different paths down the hype cycle. Hulk Hogan and Peter Thiel destroyed Nick Denton’s Gawker empire. Vice, the best brand and the least credible business of the group, has collapsed under the sheer weight of its own $5.7 billion valuation and appears to be ready to be sold off for parts. Vox has steered carefully through the wreckage and recently raised $100 million on terms similar to the ones it was offering in 2014.
BuzzFeed, which had by then swallowed HuffPost, was the only one to make it to the public markets, riding the very end of the SPAC craze in 2021 to a messy public offering. I’d spent eight years leading a newsroom that, at its best, broke some of the biggest, most serious stories in the world without leaving behind our roots in some of the weirdest parts of the internet. But I was gone by then, writing for The New York Times, where I’d managed to make trouble for various of the other characters in my book, an occupational hazard in writing about media when your sources, targets, and colleagues are the same people. In one of my first pieces, I wrote about Iger’s apparent return to power at Disney as COVID-19 spread— an article that infuriated his successor, Bob Chapek, and led to Iger’s temporary ouster. In one of my last, I wrote about Watson’s Ozy Media, which had gone from fake-it-till-you-make-it start-up tactics to an astounding set of alleged felonies. We covered his arrest this year at my new media outlet, Semafor.
BuzzFeed is shutting down its BuzzFeed News operation, with CEO Jonah Peretti writing in a company memo that it “can no longer continue to fund” the site.
The company, known for a millennial-friendly site filled with listicles and viral videos, said it is also cutting 15% of its employee base, or about 180 workers. BuzzFeed News is the section of the site that produces journalism and news coverage, such as recent articles about the shooting at a Sweet 16 party in Alabama.
The outlet won a Pulitzer Prize in 2021 for reporting on the mass detention of Muslims in China.
Peretti’s decision comes as BuzzFeed’s revenue plunged 27% in the fourth quarter, prompting the business to tumble into the red. He underlined the challenges the company is facing in the memo, sent Thursday morning to his employees, adding that BuzzFeed must cut jobs and reduce spending as a result.
“We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts,” Peretti wrote in the memo, which was shared with CBS MoneyWatch.
He added, “I made the decision to overinvest in BuzzFeed News because I love their work and mission so much.”
The company said there are “ongoing discussions about the future of BuzzFeedNews.com,” but that it plans to preserve the section’s work on the site.
“No jobs are being replaced by AI”
BuzzFeed had started tapping artificial intelligence for writing quizzes and articles, some with the byline “Buzzy the Robot.” Some of the pieces are travel-focused, with Buzzy recommending locations like Stanley, Idaho, which it deemed “a small-town slice of outdoor adventure.”
“No jobs are being replaced by AI,” the company told CBS MoneyWatch.
It added that BuzzFeed and its subsidiary HuffPost will offer roles to some BuzzFeed News journalists, while the company is also starting discussions with the News Guild union about the layoffs.
Read Peretti’s memo in full below.
Hi all,
I am writing to announce some difficult news. We are reducing our workforce by approximately 15% today across our Business, Content, Tech and Admin teams, and beginning the process of closing BuzzFeed News. Additionally, we are proposing headcount reductions in some international markets.
Impacted employees (other than those in BuzzFeed News) will receive an email from HR shortly. If you are receiving this note from me, you are not impacted by today’s changes. For BuzzFeed News, we have begun discussions with the News Guild about these actions.
As part of today’s changes, both our CRO Edgar Hernandez and COO Christian Baesler have made the decision to exit the company. I’m grateful to both of them for their passion and dedication to Complex and to BuzzFeed, Inc. Christian will be with us through the end of April, and Edgar through the end of May to help with the transition.
Marcela Martin, our President, will take on responsibility for all revenue functions effective immediately. In the US, Andrew Guendjoian is our new Head of Sales, and Ken Blom will continue in his role as Head of Revenue Operations. Globally, International Sales will move under Rich Reid, Head of International and Head of Studio, also reporting to Marcela.
I have great confidence in this revenue leadership team, and the early plans I’ve seen from them to accelerate performance from our Business Org. We will share more on their plans in the Business All Hands next week (and we are extending an invite company-wide).
The changes the Business Organization is making today are focused on reducing layers in their organization, increasing speed and effectiveness of pitches, streamlining our product mix, doubling down on creators, and beginning to bring AI enhancements to every aspect of our sales process.
While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization. As a result, we will engage with the News Guild about our cost reduction plans and what this will mean for the affected union members.
HuffPost and BuzzFeed Dot Com have signaled that they will open a number of select roles for members of BuzzFeed News. These roles will be aligned with those divisions’ business goals and match the skills and strengths of many of BuzzFeed News’s editors and reporters. We raised this idea with the News Guild this morning and look forward to discussing it further. Moving forward, we will have a single news brand in HuffPost, which is profitable, with a loyal direct front page audience.
I want to explain a little more about why we’ve come to these deeply painful decisions. We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts. Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.
But I also want to be clear: I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances. Our job is to adapt, change, improve, and perform despite the challenges in the world. We can and will do better.
In particular, the integration process of BuzzFeed and Complex, and the unification of our two business organizations, should have been executed faster and better. The macro environment is tough, but we had the potential to generate much more revenue than we delivered over the past 12 months.
Additionally, I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me 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.
More broadly, I regret that I didn’t hold the company to higher standards for profitability, to give us the buffer needed to manage through economic and industry downturns and avoid painful days like today. Our mission, our impact on culture, and our audience is what matters most, but we need a stronger business to protect and sustain this important work.
Please know that we exhausted many other cost saving measures to preserve as many jobs as possible. We are reducing budgets, open roles, travel and entertainment, and most other discretionary, non-revenue generating expenditures. Just as we reduced our footprint in NYC last year, we will be reducing our real estate in Los Angeles — from four buildings down to one, which saves millions in costs as well as mirrors our current hybrid state of work.
I’ve learned from these mistakes, and the team moving forward has learned from them as well. We know that the changes and improvements we are making today are necessary steps to building a better future.
Over the next couple of months, we will work together to run a more agile and focused business organization with the capacity to bring in more revenue. We will concentrate our news efforts in HuffPost, a brand that is profitable with a highly engaged, loyal audience that is less dependent on social platforms. We will empower our editorial teams at all of our brands to do the very best creative work and build an interface where that work can be packaged and brought to advertisers more effectively. And we will bring more innovation to clients in the form of creators, AI, and cultural moments that can only happen across BuzzFeed, Complex, HuffPost, Tasty and First We Feast.
It might not feel this way today, but I am confident the future of digital media is ours for the taking. Our industry is hurting and ready to be reborn. We are taking great pains today, and will begin to fight our way to a bright future.
On Monday we’ll begin to have conversations with each division about the way forward. And in the meantime, I hope you can take time for yourselves this weekend.
Thank you for supporting one another on a difficult day.
Over the holidays, while most media executives were perhaps looking to get a reprieve from work, Jonah Peretti was online, fully immersed in experimenting with artificial intelligence.
The BuzzFeed co-founder and chief executive, who has always raced to test out the latest technologies, was familiar with AI and predictions of how it could one day revolutionize the media industry. In fact, BuzzFeed had dabbled in using it over the years.
But Peretti, sitting in his California home in late December, started probing how the developing robot writing technology could quickly be infused into the very DNA of BuzzFeed.
In a phone interview Thursday, Peretti said that as he and a handful of colleagues prototyped how the technology could be used to enhance the site’s hallmark quizzes, interactive articles, and other types of content, he found himself genuinely having fun. “It started to feel like we were all playing,” Peretti recalled.
That “playful work,” as he described it, soon “led to multiple Google docs full of the implications of the technology and how [BuzzFeed] could build this into our platform and how we could extend it to other formats.”
Those efforts culminated in Peretti’s formal announcement on Thursday: That BuzzFeed will work with ChatGPT creator OpenAI to assist in the creation of content for its audience and move artificial intelligence into the “core business.”
Peretti said that he understood people might read the news and conclude that BuzzFeed was, in short, moving to replace humans with robots. But Peretti insisted that is not his vision for the technology, even as he predicted other companies will likely go down that dark path.
“I think that there are two paths for AI in digital media,” Peretti said. “One path is the obvious path that a lot of people will do — but it’s a depressing path — using the technology for cost savings and spamming out a bunch of SEO articles that are lower quality than what a journalist could do, but a tenth of the cost. That’s one vision, but to me, that’s a depressing vision and a shortsighted vision because in the long run it’s not going to work.”
“The other path,” Peretti continued, “which is the one that gets me really excited, is the new model for digital media that is more personalized, more creative, more dynamic — where really talented people who work at our company are able to use AI together and entertain and personalize more than you could ever do without AI.”
Put more simply, Peretti said he envisions artificial intelligence being used to enhance the work of his employees, not replace them.
The example the company provided is the BuzzFeed quiz. Typically, a human would write the questions and perhaps a dozen responses that would be delivered to the user based on their inputs. But, with AI, the staffer could write the questions and the software could spit out a highly personalized response for the user. In the supplied example, a user would take a quick quiz and the AI would write a short RomCom using the data provided.
“We don’t have to train the AI to be as good as the BuzzFeed writers because we have the BuzzFeed writers, so they can inject language, ideas, cultural currency and write them into prompts and the format,” Peretti said. “And then the AI pulls it together and creates a new piece of content.”
Peretti indicated that he had no interest in utilizing artificial intelligence to replace human journalists for authoring news articles, as the technology outlet CNET recently did with disastrous consequences (dozens of the outlet’s stories written by AI were riddled with errors that required correcting.)
“There’s the CNET path, and then there is the path that BuzzFeed is focused on,” Peretti said. “One is about costs and volume of content, and one is about ability.”
“Even if there are a lot of bad actors who try to use AI to make content farms, it won’t win in the long run,” Peretti predicted. “I think the content farm model of AI will feel very depressing and dystopian.”
A couple weeks ago, in his idiosyncratic fan-correspondence newsletter, “The Red Hand Files,” musician and author Nick Cave critiqued a ”song in the style of Nick Cave”—submitted by “Mark” from Christchurch, New Zealand—that was created using ChatGPT, the latest and most mind-boggling entrant in a growing field of robotic-writing software. At a glance, the lyrics evoked the same dark religious overtones that run through much of Cave’s oeuvre. Upon closer inspection, this ersatz Cave track was a low-rent simulacrum. “I understand that ChatGPT is in its infancy but perhaps that is the emerging horror of AI—that it will forever be in its infancy,” Cave wrote, “as it will always have further to go, and the direction is always forward, always faster. It can never be rolled back, or slowed down, as it moves us toward a utopian future, maybe, or our total destruction. Who can possibly say which? Judging by this song ‘in the style of Nick Cave’ though, it doesn’t look good, Mark. The apocalypse is well on its way. This song sucks.”
Cave’s ChatGPT takedown—“with all the love and respect in the world, this song is bullshit, a grotesque mockery of what it is to be human”—set the internet ablaze, garnering uproarious coverage from Rolling Stone and Stereogum, to Gizmodo and The Verge, to the BBC and the Daily Mail. That his commentary hit such a nerve probably has less to do with the influence of an underground rock icon than it does with the sudden omnipresence of “generative artificial intelligence software,” particularly within the media and journalism community.
Since ChatGPT’s November 30 release, folks in the business of writing have increasingly been futzing around with the frighteningly proficient chatbot, which is in the business of, well, mimicking their writing. “We didn’t believe this until we tried it,” Mike Allengushed in his Axios newsletter, with the subject heading, “Mind-blowing AI.” Indeed, reactions tend to fall somewhere on a spectrum between awe-inspired and horrified. “I’m a copywriter,” a London-based freelancer named Henry Williamsopined this week for The Guardian (in an article that landed atop the Drudge Report via a more sensationalized version aggregated by The Sun), “and I’m pretty sure artificial intelligence is going to take my job…. [I]t took ChatGPT 30 seconds to create, for free, an article that would take me hours to write.” A Tuesday editorial in the scientific journal Nature similarly declared, “ChatGPT can write presentable student essays, summarize research papers, answer questions well enough to pass medical exams and generate helpful computer code. It has produced research abstracts good enough that scientists found it hard to spot that a computer had written them…That’s why it is high time researchers and publishers laid down ground rules about using [AI tools] ethically.”
BuzzFeed, for one, is on it: “Our work in AI-powered creativity is…off to a good start, and in 2023, you’ll see AI inspired content move from an R&D stage to part of our core business, enhancing the quiz experience, informing our brainstorming, and personalizing our content for our audience,” CEO Jonah Peretti wrote in a memo to staff on Thursday. “To be clear, we see the breakthroughs in AI opening up a new era of creativity that will allow humans to harness creativity in new ways with endless opportunities and applications for good. In publishing, AI can benefit both content creators and audiences, inspiring new ideas and inviting audience members to co-create personalized content.” The work coming out of BuzzFeed’s newsroom, on the other hand, is a different matter. “This isn’t about AI creating journalism,” a spokesman told me.
Meanwhile, if you made it to the letters-to-the-editor section of Wednesday’s New York Times, you may have stumbled upon one reader’s rebuttal to a January 15 Times op-ed titled, “How ChatGPT Hijacks Democracy.” The rebuttal was crafted—you guessed it—using ChatGPT: “It is important to approach new technologies with caution and to understand their capabilities and limitations. However, it is also essential not to exaggerate their potential dangers and to consider how they can be used in a positive and responsible manner.” Which is to say, you need not let Skynet and The Terminator invade your dreams just yet. But for those of us who ply our trade in words, it’s worth considering the more malignant applications of this seemingly inexorable innovation. As Sara Fischernoted in the latest edition of her Axios newsletter, “Artificial intelligence has proven helpful in automating menial news-gathering tasks, like aggregating data, but there’s a growing concern that an over-dependence on it could weaken journalistic standards if newsrooms aren’t careful.” (On that note, I asked Times executive editor Joe Kahn for his thoughts on ChatGPT’s implications for journalism and whether he could picture a use where it might be applied to journalism at the paper of record, but a spokeswoman demurred, “We’re gonna take a pass on this one.”)
The “growing concern” that Fischer alluded to in her Axios piece came to the fore in recent days as controversy engulfed the otherwise anodyne technology-news publication CNET, after a series of articles from Futurism and The Verge drew attention to the use of AI-generated stories at CNET and its sister outlet, Bankrate. Stories full of errors and—it gets worse—apparently teeming with robot plagiarism. “The bot’s misbehavior ranges from verbatim copying to moderate edits to significant rephrasings, all without properly crediting the original,” reported Futurism’s Jon Christian. “In at least some of its articles, it appears that virtually every sentence maps directly onto something previously published elsewhere.” In response to the backlash, CNET halted production on its AI content farm while editor in chief Connie Guglielmo issued a penitent note to readers: “We’re committed to improving the AI engine with feedback and input from our editorial teams so that we—and our readers—can trust the work it contributes to.”
For an even more dystopian tale, check out this yarn from the technology journalist Alex Kantrowitz, in which a random Substack called “The Rationalist” put itself on the map with a post that lifted passages directly from Kantrowitz’s Substack, “Big Technology.” This wasn’t just some good-old-fashioned plagiarism, like Melania Trump ripping off a Michelle Obama speech. Rather, the anonymous author of “The Rationalist”—an avatar named “PETRA”—disclosed that the article had been assembled using ChatGPT and similar AI tools. Furthermore, Kantrowitz wrote that Substack indicated it wasn’t immediately clear whether “The Rationalist” had violated the company’s plagiarism policy. (The offending post is no longer available.) “The speed at which they were able to copy, remix, publish, and distribute their inauthentic story was impressive,” Kantrowitz wrote. “It outpaced the platforms’ ability, and perhaps willingness, to stop it, signaling Generative AI’s darker side will be difficult to tame.” When I called Kantrowitz to talk about this, he elaborated, “Clearly this technology is gonna make it a lot easier for plagiarists to plagiarize. It’s as simple as tossing some text inside one of these chatbots and asking them to remix it, and they’ll do it. It takes minimal effort when you’re trying to steal someone’s content, so I do think that’s a concern. I was personally kind of shocked to see it happen so soon with my story.”
Sam Altman, the CEO of ChatGPT’s parent company, OpenAI, said in an interview this month that the company is working on ways to identify AI plagiarism. He’s not the only one: I just got off the phone with Shouvik Paul, chief revenue officer of a company called Copyleaks, which licenses plagiarism-detection software to an array of clients ranging from universities to corporations to several major news outlets. The company’s latest development is a tool that takes things a step further by using AI to detect whether something was written using AI. There’s even a free browser plug-in that anyone can take for a spin, which identifies AI-derived copy with 99.2% accuracy, according to Paul. It could be an easy way to sniff out journalists who pull the wool over their editors’ eyes. (Or, in the case of the CNET imbroglio, publications that pull the wool over their readers’ eyes.) But Paul also hopes it can be used to help people identify potential misinformation and disinformation in the media ecosystem, especially heading into 2024. “In 2016, Russia had to physically hire people to go and write these things,” he said. “That costs money. Now, the cost is minimal and it’s a thousand times more scalable. It’s something we’re definitely gonna see and hear about in this upcoming election.”
The veteran newsman and media entrepreneur Steven Brill shares Paul’s concern. “ChatGPT can get stuff out much faster and, frankly, in a much more articulate way,” he told me. “A lot of the Russian disinformation in 2016 wasn’t very good. The grammar and spelling was bad. This looks really smooth.” These days, Brill is the co-CEO and co-editor-in-chief of NewsGuard, a company whose journalists use data to score the trust and credibility of thousands of news and information websites. In recent weeks, NewsGuard analysts asked ChatGPT “to respond to a series of leading prompts relating to a sampling of 100 false narratives among NewsGuard’s proprietary database of 1,131 top misinformation narratives in the news…published before 2022.” (ChatGPT is primarily programmed on data through 2021.)
“The results,” according to NewsGuard’s analysis, “confirm fears, including concerns expressed by OpenAI itself, about how the tool can be weaponized in the wrong hands. ChatGPT generated false narratives—including detailed news articles, essays, and TV scripts—for 80 of the 100 previously identified false narratives. For anyone unfamiliar with the issues or topics covered by this content, the results could easily come across as legitimate, and even authoritative.” The title of the analysis was positively ominous: “The Next Great Misinformation Superspreader: How ChatGPT Could Spread Toxic Misinformation At Unprecedented Scale.” On the bright side, “NewsGuard found that ChatGPT does have safeguards aimed at preventing it from spreading some examples of misinformation. Indeed, for some myths, it took NewsGuard as many as five tries to get the chatbot to relay misinformation, and its parent company has said that upcoming versions of the software will be more knowledgeable.”
