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February 26, 2014

Behind the Buzz

Jon Steinberg ’03, president and COO of BuzzFeed, is an innovator in an ever-changing industry. Catch his remarks at this year’s BRITE conference.
Jen Itzenson

Framed on the wall behind Jon Steinberg’s desk is his “takedown piece” — the critical eviscerating that almost everyone who reaches the heights of the media world inevitably receives. The Adweek article, published in 2011 after a late-night meeting at a rooftop party in Cannes, portrays Steinberg as a hyperactive, constantly pitching salesman, the “anxious cocaine” to BuzzFeed cofounder Jonah Peretti’s “giddily nervous marijuana.” The article goes on to mock BuzzFeed itself, including its use of branded content, and speculates that the five-year-old site might eventually “do well, or not” with advertisers and readers.

“I put the story on the wall because it annoyed me so much at the time,” says Steinberg, who was named a Media Maven by rival publication Ad Age the following year. “It reminds me of how thin-skinned I was back then — and of how far we’ve come.”

“You get a decade, and then you really have to reinvent yourself to get beyond that. Businesses that face fierce competition need to innovate.”

As of the end of 2013, BuzzFeed was attracting 130 million visitors a month. It has 400 employees, most of whom are based in the company’s New York headquarters, just across the street from the Flatiron Building. When Steinberg joined in 2010, BuzzFeed was a 15-person shop with about 6 million monthly visitors and very little cash coming in. Today, branded content — articles, videos, and lists created by BuzzFeed staffers and sponsored by advertisers — accounts for 100 percent of its revenue. According to a Bloomberg news report, the company had a projected $60 million in sales in 2013 and is on track to double that in 2014.

5 Twitter Feeds Jon Steinberg '03 Follows for Tech News

@peretti
@techmeme
@carlquintanilla
@peterlauria3
@recode

BuzzFeed is a social news and entertainment company, combining popular viral content on the web with original reporting covering everything from politics to breaking news and foreign policy. A glance at its homepage on a given day might yield an article on an entertainment lawsuit, an on-the-ground report from the protests in Ukraine, and a feature on a campaign for domestic surveillance reform — as well as a few cat videos. Though there is an increasing proportion of hard news, BuzzFeed remains heavy on lists: the 25 Most Reblogged Places of 2013, or the 10 Best Dog Vines. The branded content — written in a similar vein as the lighter articles and lists — is set off against a pale yellow background and sponsored by advertisers like Samsung and Edy’s Ice Cream.

Church and State

Though some critics have questioned the blend of news and branded content, Steinberg describes BuzzFeed’s model as no different from that of a TV network whose reality shows help support its news programs. The division between news and paid content is reflected in the layout of the BuzzFeed office itself, with editorial on one side and business the other. “We have a church-state divide,” Steinberg explains. “We’re just like a newspaper: our writers have complete editorial independence to write reviews of technology products and to criticize companies that include our advertisers.” Ben Smith, formerly of Politico, is its editor-in-chief; Mark Schoofs, a Pulitzer Prize–winning journalist formerly of ProPublica and the Wall Street Journal, was hired in late 2013 to head BuzzFeed’s new investigation team.

BuzzFeed’s expansion into hard news is particularly notable given the current state of the media industry. In a December 2013 New York Times article about New York magazine’s decision to cut back to two issues a month, the media writer David Carr cited BuzzFeed as one of the reasons the 46-year-old magazine was struggling in an increasingly competitive space. Steinberg, for his part, was not surprised when he learned of New York’s decision. That same week, he had watched a 60 Minutes feature on Jeff Bezos in which the founder of Amazon stated his belief that “companies come and go” and that even “the shiniest and most important [companies] of any era — you wait a few decades and they’re gone.”

“That’s the way disruption occurs,” Steinberg says. “You get a decade, and then you really have to reinvent yourself to get beyond that. Businesses that face fierce competition need to innovate. Should a print magazine that didn’t move online adequately and didn’t innovate in their ad products quickly enough survive?” BuzzFeed took a very different route than traditional news sites, he notes. “We chose an ad revenue model that everybody mocked at the beginning.” In his view, branded content harkens back to the great storytelling of famed ad exec David Ogilvy. “Both are story-driven and speak to the aspirations of what the brand or product stands for,” says Steinberg. He and Peretti experimented with the form, met with clients and agencies, and experimented some more. “Now everybody’s trying it.”

With BuzzFeed, Steinberg — who cites Bruce Greenwald’s class on the economics of strategic behavior as the most influential course in his education — was determined to compete and thrive. The site was founded on the notions that technology is essential to a media company’s growth and success and that social media generates traffic. Most of the site’s readers don’t access content through its homepage, but through their friends’ Facebook pages and Twitter accounts — and that’s fine with BuzzFeed. Steinberg calls Facebook the new cable system and BuzzFeed the new Viacom or Time Warner.

“We recognized that social media would be how everyone got all of their information — their hard news, their entertainment, everything,” Steinberg says of BuzzFeed’s innovations. “And we also created a new kind of content — lighthearted animals and memes and what people sometimes call listicles. It’s a new kind of media that really generated a lot of engagement and interest from people who are 18 to 34. They’re 60 percent of our audience, and that’s a much bigger youth audience that any traditional media company has.”

Mistakes and Luck

Such well-orchestrated growth might lead you to think that Steinberg’s own trajectory was smoothly planned and executed. He insists this was not the case. “All I’ve done is make mistakes and get lucky,” he says. “I try to give people advice on how to plan their careers because I made so many mistakes with my own path.”

One of the highlights of his early, pre-Columbia career was the two years he spent working for Jerry Speyer ’64, cofounder of real estate company Tishman Speyer and member of Columbia Business School’s Board of Overseers. Steinberg regrets leaving Speyer as soon as he did. “I wish I’d been working in the real estate industry with Jerry” during the slump before the 2000 bubble, he says. “Tishman Speyer continued to thrive. And Jerry was a tremendous mentor, one of the most influential mentors of my career.”

After graduating from Columbia, he went to Booz Allen Hamilton. “I sort of meandered and tried different things,” Steinberg says. He enjoyed a later stint at Majestic Research, which specializes in research through data mining. “I loved that place, but then I got stuck on Wall Street and didn’t find my way out until I started at Google,” he says. At Google, he was a strategic partner development manager on the company’s Small Medium Business Partnerships team, a position he credits with putting his career back on track. “That took me back into start-ups, into technology — all of the stuff that I liked. And through a couple more bends in the road, I found my way to meeting Jonah.”

That was four years ago, when Steinberg was working for Polaris Partners, a venture fund. He and a partner opened their New York office, Dogpatch Labs, which offered space to start-ups. BuzzFeed was one of many deals the fund considered; Polaris passed, but Steinberg was intrigued. “I had seen what Jonah and Ken Lerer had built at Huffington Post, and I knew they would do something incredible,” he says. “And they took a bet on me.” He joined BuzzFeed a couple of months later.

Steinberg’s passion for innovation is as strong as ever. Last fall, BuzzFeed announced its partnership with Duolingo, a language-learning app: in exchange for the app’s free language lessons, users translate BuzzFeed’s stories into their native language. That came shortly after Buzzfeed announced a partnership with one-time media disrupter CNN to launch a jointly branded YouTube channel with clips that are designed, like all BuzzFeed creations, to be shared. “CNN has great content from around the world,” Steinberg says. “BuzzFeed brings the sentiment to remix it for our social mobile audience.” Partnerships can be hard, he concedes; BuzzFeed looks for opportunities in which what each partner brings to the table is “simple, clear, and almost obvious.”

Even amid the new partnerships and expansions, BuzzFeed is planning to increase its international news coverage this year. While newspapers are shutting down their far-flung outposts, BuzzFeed has found a way to extend its reach across the globe. This doesn’t surprise Steinberg. “The Internet allows us to do more with less, to be more nimble and connected as a company.”

Meanwhile, BuzzFeed’s sponsored videos continue to reach new heights. A few months ago, its most successful sponsored video ever— “A Cat’s Guide to Taking Care of Your Human,” brought to you by Tidy Cats — received 3.8 million page views within a week. “Almost four million page views,” Steinberg says, marveling at the success of a business model that many thought would never work. “That’s insane.”