HuffPo Co-Founder on Where He Thinks Tina Brown's Daily Beast Went Wrong
Just in case you missed it, BuzzFeed Chairman Ken Lerer was the star of the full-page front-of-book Q&A in yesterday's New York Times Magazine. (Though the magazine doesn't ID him as such, he's also managing director of Lerer Ventures, a seed-stage venture capital fund, and chairman of Betaworks.) The interview, by Amy Chozick, is a brisk, entertaining read that covers everything from the NRA to nepotism to animal slide shows, so please read it. But for now, I'd like to dwell on this single exchange:
Q: People thought Tina Brown's Daily Beast would go head to head with Arianna [Huffington] and The Huffington Post, which you founded together. But that hasn't really happened. Is it a disadvantage to have an editor from the old media days of town cars and huge salaries?
A: I know Tina well, and she can be hungry when she wants to be. We spent a million dollars the first year of The Huffington Post. My guess is that they spent at least 10 times that the first year. So it doesn't mean that Tina spent so much, it just means that maybe she raised too much money. Sometimes it isn't good to have all that money, especially with a start-up. They don't have particularly great technology, and they haven't built a community.
I stopped on that part of the interview because in 2008 I somewhat controversially reported backer InterActive Corp.'s rather insane budget numbers for The Daily Beast:
An IAC insider (I've consulted for IAC in the past, though I had absolutely nothing to do with The Daily Beast) tells me that it was budgeted, at least initially, to burn through $18 million in three years, with (wildly optimistic) hopes for advertising revenue of at least $10 million in that same time. More than half of Tina's 20 or so full-time staffers were budgeted to earn $100,000 or more a year.
At the time, the New York tech/media community collectively rolled its eyes at that combination of old-media-style excess and corporate self-delusion. And various IACers, including Tina Brown, half-heartedly challenged my numbers ("Ms. Brown says that number is high," is how the Times put it) -- but that tepid posturing appears to have been for internal damage control more than anything. The Daily Beast's budget (a detailed, formal document that I held in my grubby hands), you see, had been shared with me by an outraged IACer from another division; the general feeling in-house at the time was that The Beast was a ridiculous resource drain.
Since then, of course, The Daily Beast got tangled up with even more costs by merging with Newsweek, a move that IAC Chairman Barry Diller has lately called a "mistake." The company has since ended Newsweek's print edition and put a revamped Newsweek.com on the block.
This morning I asked comScore's Andrew Lipsman, VP, industry analysis, for some relevant figures to help put Lerer's new comments in context. In June, The Huffington Post received 42.3 million unique U.S visitors, while BuzzFeed got 15.8 million and The Daily Beast pulled in 5.0 million.
Simon Dumenco is the "Media Guy" media columnist for Advertising Age. Follow him on Twitter @simondumenco.