Business Insider Sparks Media Maelstrom Over $12 Million Funding Round

 
 
 

Business Insider raised an additional $12 million of funding earlier this month, with major investors including Amazon CEO Jeff Bezos, and will be expanding into the U.K., according to the Wall Street Journal.

Michael Wolff of USA Today — a ubiquitous columnist and longtime media entrepreneur — remains unimpressed B.I.’s rocket ship growth. B.I. founder Henry Blodget, unsurprisingly, offered a quick retort, as well as a few corrections for the USA Today piece:

Michael Wolff, USA Today: “Part of the problem, in classic publishing terms, is that Business Insider, like the other traffic aggregators, is not an expression of a particular coherent vision or sensibility that people are compelled to seek out. It is, rather, running after the market instead of creating one. Business InsiderBuzzFeedGawker, et al., have created true modern brands — brands larger than their revenue streams and current value. That’s a digital conundrum, illusion vs. reality. You can look at them as works in progress — or as houses of cards.”

Henry Blodget, Business Insider co-founder and editor-in-chief: “In short, the pressure on ad prices at traditional news organizations is good news for our clients and us. We are better at serving digital readers than many traditional news organizations, so we can thrive on these “digital dimes.” We also have a successful subscription business, which we and our members are very excited about. So, we agree with USA Today about the trend of declining digital ad prices at traditional news sites. We hope this trend continues.”

Dan Primack, Fortune Magazine: “Yes, it is possible that existing investors all participated at the exact same company valuation as they did last time around. But it also is possible that they invested at a higher valuation (or at a lower one). Higher valuations are not the exclusive result of bringing in a new investor. Nor do insider rounds mean that everyone kept their present ownership stakes. To be sure, I can’t fault a media reporter for not knowing all the intricacies of venture capital. It’s not his job. But you’d think someone might have looked this over.”