Bubble has burst for the digital sites that upset news media

Towards the end of Traffic, an account of the early years of internet publishing, Ben Smith, the former editor-in-chief of BuzzFeed News, writes that the site's failings had come about as a result of a "utopian ideology, from a kind of magical thinking"

- Edward Helmore

No truer words, perhaps, for a business that, for a decade, paddled in a warm bath of venture capital funding but never fully controlled its pricing and distribution, a fundamental business requirement.

A pioneer of the internet news business, BuzzFeed News, which walked away with a Pulitzer prize for international reporting in 2021, said it was shutting down on 20 April after shares in the company had tumbled 90% since it went public. Jonah Peretti, the chief executive, said the company could "no longer continue to fund" the site. But that was just one of the pieces of bad news that has hit the digital media sector.

Vice News, another pioneer that once achieved a $5.7bn valuation, said it was reorganising its news operation and cutting jobs as it prepared for a sale. Last Friday, Vice was reportedly nearing a $400m acquisition deal from Fortress Investment Group and Soros Fund Management. The deal, which would save the company from liquidation, would wipe out nearly all Vice stockholders, including the private equity firm TPG Group, Sixth Street Partners and James Murdoch.