Bustle Digital Group — owner of Bustle, Inverse, Input, Mic and other titles — could eventually join the ranks of startups going public via a special purpose acquisition company (SPAC).
During an interview about the state of BDG and the digital media industry at the end of 2020, founder and CEO Bryan Goldberg laid out ambitious goals for the next few years.
“Where do I want to see the company in three years? I want to see three things: I want to be public, I want to see us driving a lot of profits and I want it to be a lot bigger, because we’ve consolidated a lot of other publications,” he said.
He added that those goals connect, because by going public, BDG can raise “hundreds of millions dollars,” which Goldberg wants to use to “buy a lot of media companies.”
That might seem like bluster after a year in which many digital media companies (including BDG) had to make serious cuts. But Goldberg said that the company would be profitable in 2020, with revenue that’s “a little bit under $100 million.” And it won’t be the first digital media company to take a similar route — Group Nine created a SPAC that went public last week.
“I want to prove that we can be highly profitable,” he said. “A lot of startups don’t have that goal. A lot of VCs tell their startups: Don’t worry about profits, don’t worry about losing money. I don’t believe in that.”
In addition to his plans to go public, Goldberg also discussed how acquisitions have helped Bustle’s business, his joint venture to purchase W Magazine and digital media’s “overcapitalization” problem. You can read our full conversation, edited for length and clarity, below.
TechCrunch: The last time I caught up with someone at BDG, it was with [the company’s president Jason Wagenheim] and that was when you guys were dealing with the initial fallout [from the pandemic]. Now we’re a lot further into whatever this new world is, so what is your sense of where BDG is now, versus where it was in the early days of the pandemic?
Bryan Goldberg: It might be the craziest, most eventful six months for many of us in our lives. And certainly, for those of us in this industry, the difference between April and October, it’s really hard to fathom, it’s complete night and day. April was a very frightening time for everyone, personally and professionally across the country, across the world.
From an advertising standpoint, it was a really scary time, because we have clients across every industry, and every industry was impacted differently. We have clients who were greatly impacted — theme parks, car makers, hotel companies, airlines — and then we had clients who were not as badly affected, such as a lot of CPG clients, who everybody depended upon so much during the pandemic.
There was a huge pause in our business in in March, April and May. For a lot of clients, tossing advertising was a sort of knee-jerk reaction to the sudden shock of COVID, and so we saw a huge negative impact in our second quarter. What we started to see in the third quarter, and especially now in the fourth quarter, is now that the shock of COVID is behind us, the macro trends that were catalyzed by COVID are now moving into the forefront.
The story of media is no longer about the shock of COVID. The story of media is now about all of the changes to our world, and changes to our industry that were brought about as a consequence of COVID.
The good news for our company, and the good news for other digital media companies, is it looks like the future is being accelerated. It looks like people are watching less television, and so advertisers are moving their budgets into digital faster than they would have had it not been for COVID. Even things like live sports, [their] TV ratings are way down. And a lot of advertisers are saying, “Is there efficacy anymore in cable television or broadcast television?” And the magazine industry was heavily impaired, simply because magazines are a physical medium, and people didn’t want to pass around magazines or read magazines at the dentist’s office, so we probably saw some print budget move into digital as well.
Industry analysts now are going to take up their estimates of what digital revenue is going to look like in 2021, 2022 and beyond. I also think we’ve seen a world in which a lot of brand advertisers are starting to think about what happens when they start to spend beyond Facebook and Google. For most of the last three years, there’s been so much talk about the duopoly, the idea that Facebook and Google are going to eat almost every last dollar of advertising. What we’ve seen in the last three months is advertisers saying that this needs to be the moment in which they learn how to deploy advertising spend digitally beyond Facebook or Google.
No, it doesn’t mean they’re all pulling out of Facebook — Facebook and Google are doing just fine. But there are still tens of billions of dollars that need to be deployed outside of Facebook and Google. And you’re seeing winners such as Snapchat, Pinterest. Both had incredibly strong earnings. They’re benefiting from the same thing that benefits Bustle Digital Group and a lot of other digital media players who aren’t Facebook and Google, which is you’re seeing big ad spenders finally deciding that now’s the time to find other ways to deploy advertising spend.
I think those are the two big trends: Dollars moving to digital out of TV faster than we thought, and major advertisers using now as a time to find other channels beyond Facebook and Google.
So when you look at how that is impacting Bustle’s business, has it returned to pre-COVID levels?
For us, when we reflect upon the year 2020, we see that we had a great first quarter, we see that we’re having an incredible fourth quarter, and we have a big, epic crater in the second and third quarters. So when we look at the year, we basically have to say to ourselves, if it were not for that crater in the second and third quarters, what would this year have looked like? We would have had revenue well in excess of $100 million. Now, we’re gonna have revenue a little bit under $100 million.
But when we think about how we prepare for 2021 and set goals for 2021, we have to set goals for 2021 as though COVID had never happened, we have to set goals for 2021 without using Q2 and Q3 as a sort of excuse for lowering expectations. Because the fourth quarter, the quarter we’re currently in, has exceeded our wildest expectations.
People sort of sat up and took notice of the company because you had a pretty aggressive acquisition strategy. I imagine that strategy had to change a little bit in 2020. To what extent do you feel that ambition is something that you can pick up again?
So to be clear, not only do we feel great about our strategy, our strategy was critical in helping our company survive and ultimately thrive in the wake of the virus. You know, we made two acquisitions [in 2019] — in the science and technology category, we bought Inverse, which is a science and technology publication, and then Josh Topolsky launched a tech-and-gadget publication for us called Input Magazine that’s growing very quickly.
It’s critical that we had that strategy, because no single advertiser category has performed better for us in 2020 than tech — we more than tripled our revenue from technology clients this year, because technology has thrived through COVID. Had we not had an acquisition strategy, had we not diversified into tech media publishing, we certainly would not have had the outcome we had in 2020. That’s just the reality.
Categories like beauty, fashion, retail were very hard hit. Those have traditionally been our bread and butter, and they’re going to be great again, in 2021. But this spring, beauty companies weren’t doing so well, because people weren’t leaving the house. So the strategy worked, in part, because we diversified the categories in which we created content, which allowed us to diversify the advertiser base. And we’re gonna continue full speed ahead in 2021.
Now, you know, we did six acquisitions in 2019. I don’t know if we’ll do six acquisitions in 2021. But I want to do a lot more than one acquisition in 2021.
Facebook’s decision-review body to take “weeks” longer over Trump ban call – TechCrunch
Facebook’s self-styled and handpicked ‘Oversight Board’ will make a decision on whether or not to overturn an indefinite suspension of the account of former president Donald Trump within “weeks”, it said in a brief update statement on the matter today.
The high profile case appears to have attracted major public interest, with the FOB tweeting that it’s received more than 9,000 responses so far to its earlier request for public feedback.
It added that its commitment to “carefully reviewing all comments” after an earlier extension of the deadline for feedback is responsible for the extension of the case timeline.
The Board’s statement adds that it will provide more information “soon”.
Trump’s indefinite suspension from Facebook and Instagram was announced by Facebook founder Mark Zuckerberg on January 7, after the then-president of the U.S. incited his followers to riot at the nation’s Capitol — an insurrection that led to chaotic and violent scenes and a number of deaths as his supporters clashed with police.
However Facebook quickly referred the decision to the FOB for review — opening up the possibility that the ban could be overturned in short order as Facebook has said it will be bound by the case review decisions issued by the Board.
After the FOB accepted the case for review it initially said it would issue a decision within 90 days of January 21 — a deadline that would have fallen next Wednesday.
However it now looks like the high profile, high stakes call on Trump’s social media fate could be pushed into next month.
It’s a familiar development in Facebook-land. Delay has been a long time feature of the tech giant’s crisis PR response in the face of a long history of scandals and bad publicity attached to how it operates its platform. So the tech giant is unlikely to be uncomfortable that the FOB is taking its time to make a call on Trump’s suspension.
After all, devising and configuring the bespoke case review body — as its proprietary parody of genuine civic oversight — is a process that has taken Facebook years already.
In related FOB news this week, Facebook announced that users can now request the board review its decisions not to remove content — expanding the Board’s potential cases to include reviews of ‘keep ups’ (not just content takedowns).
This report was updated with a correction: The FOB previously extended the deadline for case submissions; it has not done so again as we originally stated
Facebook faces ‘mass action’ lawsuit in Europe over 2019 breach – TechCrunch
Facebook is to be sued in Europe over the major leak of user data that dates back to 2019 but which only came to light recently after information on 533M+ accounts was found posted for free download on a hacker forum.
Today Digital Rights Ireland (DRI) announced it’s commencing a “mass action” to sue Facebook, citing the right to monetary compensation for breaches of personal data that’s set out in the European Union’s General Data Protection Regulation (GDPR).
Article 82 of the GDPR provides for a ‘right to compensation and liability’ for those affected by violations of the law. Since the regulation came into force, in May 2018, related civil litigation has been on the rise in the region.
The Ireland-based digital rights group is urging Facebook users who live in the European Union or European Economic Area to check whether their data was breach — via the haveibeenpwned website (which lets you check by email address or mobile number) — and sign up to join the case if so.
Information leaked via the breach includes Facebook IDs, location, mobile phone numbers, email address, relationship status and employer.
Facebook has been contacted for comment on the litigation.
The tech giant’s European headquarters is located in Ireland — and earlier this week the national data watchdog opened an investigation, under EU and Irish data protection laws.
A mechanism in the GDPR for simplifying investigation of cross-border cases means Ireland’s Data Protection Commission (DPC) is Facebook’s lead data regulator in the EU. However it has been criticized over its handling of and approach to GDPR complaints and investigations — including the length of time it’s taking to issue decisions on major cross-border cases. And this is particularly true for Facebook.
With the three-year anniversary of the GDPR fast approaching, the DPC has multiple open investigations into various aspects of Facebook’s business but has yet to issue a single decision against the company.
(The closest it’s come is a preliminary suspension order issued last year, in relation to Facebook’s EU to US data transfers. However that complaint long predates GDPR; and Facebook immediately filed to block the order via the courts. A resolution is expected later this year after the litigant filed his own judicial review of the DPC’s processes).
Since May 2018 the EU’s data protection regime has — at least on paper — baked in fines of up to 4% of a company’s global annual turnover for the most serious violations.
Again, though, the sole GDPR fine issued to date by the DPC against a tech giant (Twitter) is very far off that theoretical maximum. Last December the regulator announced a €450k (~$547k) sanction against Twitter — which works out to around just 0.1% of the company’s full-year revenue.
That penalty was also for a data breach — but one which, unlike the Facebook leak, had been publicly disclosed when Twitter found it in 2019. So Facebook’s failure to disclose the vulnerability it discovered and claims it fixed by September 2019, which led to the leak of 533M accounts now, suggests it should face a higher sanction from the DPC than Twitter received.
However even if Facebook ends up with a more substantial GDPR penalty for this breach the watchdog’s caseload backlog and plodding procedural pace makes it hard to envisage a swift resolution to an investigation that’s only a few days old.
Judging by past performance it’ll be years before the DPC decides on this 2019 Facebook leak — which likely explains why the DRI sees value in instigating class-action style litigation in parallel to the regulatory investigation.
“Compensation is not the only thing that makes this mass action worth joining. It is important to send a message to large data controllers that they must comply with the law and that there is a cost to them if they do not,” DRI writes on its website.
It also submitted a complaint about the Facebook breach to the DPC earlier this month, writing then that it was “also consulting with its legal advisors on other options including a mass action for damages in the Irish Courts”.
It’s clear that the GDPR enforcement gap is creating a growing opportunity for litigation funders to step in in Europe and take a punt on suing for data-related compensation damages — with a number of other mass actions announced last year.
In the case of DRI its focus is evidently on seeking to ensure that digital rights are upheld. But it told RTE that it believes compensation claims which force tech giants to pay money to users whose privacy rights have been violated is the best way to make them legally compliant.
Facebook, meanwhile, has sought to play down the breach it failed to disclose in 2019 — claiming it’s ‘old data’ — a deflection that ignores the fact that people’s dates of birth don’t change (nor do most people routinely change their mobile number or email address).
Plenty of the ‘old’ data exposed in this latest massive Facebook leak will be very handy for spammers and fraudsters to target Facebook users — and also now for litigators to target Facebook for data-related damages.
Pakistan temporarily blocks social media – TechCrunch
Pakistan has temporarily blocked several social media services in the South Asian nation, according to users and a government-issued notice reviewed by TechCrunch.
In an order titled “Complete Blocking of Social Media Platforms,” the Pakistani government ordered Pakistan Telecommunication Authority to block social media platforms including Twitter, Facebook, WhatsApp, YouTube, and Telegram from 11am to 3pm local time (06.00am to 10.00am GMT) Friday.
The move comes as Pakistan looks to crackdown against a violent terrorist group and prevent troublemakers from disrupting Friday prayers congregations following days of violent protests.
Earlier this week Pakistan banned the Islamist group Tehrik-i-Labaik Pakistan after arresting its leader, which prompted protests, according to local media reports.
An entrepreneur based in Pakistan told TechCrunch that even though the order is supposed to expire at 3pm local time, similar past moves by the government suggests that the disruption will likely last for longer.
Though Pakistan, like its neighbor India, has temporarily cut phone calls access in the nation in the past, this is the first time Islamabad has issued a blanket ban on social media in the country.
Pakistan has explored ways to assume more control over content on digital services operating in the country in recent years. Some activists said the country was taking extreme measures without much explanations.
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