Why politicians want to buy the news | Semafor

I wrote a whole book about the social news era, and I won’t bore you at too great length here with my BuzzFeed News post-mortem, or with a list of the mistakes we made along the way.

But Peretti is obviously correct that we and the investors in our generation of the internet wildly overestimated how big our business could get. We built a news division that brought BuzzFeed relevance at a cost we couldn’t afford, and failed to create a smaller, standalone news business. Peretti said he’s optimistic he can fix that with HuffPost, which “was built as a front page and destination and we’ve been able to use that loyal audience to create a profitable business.”

More broadly, however, his comments and Ramaswamy’s reflect an underlying conflation of the news and media businesses. In fact news is a tiny, tough segment inside the larger business of media — but one with outsized impact. And as I told Ramaswamy in our conversation, just as journalists often project political motives onto entrepreneurs, politicians often conflate media and journalism with pure politics.

Ramaswamy was right to reject a round of sneering from journalists lecturing him about equity structure. But his analysis of the media business was itself quite naive. His proposal for BuzzFeed — to turn it into a platform for video-makers across the spectrum, a kind of YouTube with a higher quality standard and commitment to editorial openness — describes a decade-long graveyard of startups, some of which make BuzzFeed look like a runaway success. Rumble, which adopted more or less this model, lost $116 million last year. The handful of exceptions, like Nebula, operate markedly different businesses and grew carefully out of the creator economy. (Ramaswamy was an early investor in Rumble.)

Ramaswamy’s own experience — making media that didn’t generate him money or votes, but which made him extremely relevant — doesn’t describe a business. It describes politics.

And that’s always been another reason to buy the news. The most interesting thing Ramaswamy said in our interview wasn’t about mere return on investment: “When you think about driving change to the private sector, there’s two sets of rails that really matter: communications and financial services,” he said.

Musk, who executed this maneuver on a far larger scale when he bought Twitter, has seen the company’s value sink as he moved it further from a struggling advertising business to a thunderdome for confrontational politics. But he also had the profound effect he sought on the American political conversation, helping to turn back a progressive wave and widening the space for a new, mostly right-wing populism. He got his money’s worth.

It’s less clear what the trade would be at RamaswamyFeed. The company’s stock is in the toilet — but you could always do worse! And the entrepreneur seemed unduly confident that he wouldn’t sacrifice the company’s main assets: a large audience at BuzzFeed and other properties that doesn’t have much interest in politics at all, and a big progressive audience at HuffPost.

But then, BuzzFeed is a lot cheaper than Twitter, and perhaps the risk of losing mere millions is worth the — political, attentional — reward.