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Last month, Mic, a news site for millennials that had once raised $US60 million and was valued on paper at more than $US100 million, laid off its staff after running out of money.
It’s become a familiar story in venture-backed digital media this year. Numerous venture-capital-backed companies have faced staff reductions and missed revenue goals, including BuzzFeed, Vox Media, and Refinery29, or closed altogether, like LittleThings.
There are numerous reasons for these misses and closings.
The cheap distribution powered by portals, then Google and Facebook, lured entrepreneurs to start content companies. Publishers and investors came to believe Facebook would share revenue with publishers in exchange for sharing their content on the platform.
Now, some are asking whether the money that helped propel the rise of digital media also stirred up unrealistic expectations for its growth – and whether pressure from these VCs contributed to decisions that did more harm than good.
Click here to read more about how billions from VC companies like Lerer Hippeau and Lightspeed that fuelled the rise of digital media and stoked crazy expectations for growth, and are now killing companies.
In other news:
Vox Media is now asking people to help cover the high cost of making videos with a $US4.99-a-month membership program. The program offers video extras like extended interviews, video recommendations and behind-the-scenes footage.
Comcast thinks it’s developed the next technology to elevate TV advertising – but it needs the industry’s buy-in. Comcast is introducing a platform Blockgraph that lets distributors, networks, and marketers connect their proprietary customer data at scale.
Snap employees will not receive cash bonuses for the second straight year. Instead, individual employees may receive performance-based bonuses in the form of stock options, according to a report by Cheddar.
Facebook could be quietly building a cryptocurrency for WhatsApp. According to Bloomberg, the Silicon Valley tech giant is reportedly trying to build a “stablecoin” pegged to the value of the dollar.
Speaking of Facebook, the company shut down fake news sites spreading false information about the Bangladesh opposition days before national elections. Facebook’s head of cybersecurity policy told the AP that the fake pages and accounts were created by Bangladeshis with government ties.
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