Katie and Tom interview New York Times media columnist Ben Smith about his piece on the deception at Ozy. This was recorded a few hours before the digital media company announced it was shutting down, following his reporting. We discuss Ozy's appeal to investors, the courting of billionaires, the nature of the fraud, and what to make of the entire cohort of digital media companies the sprang up at the same time.
Ben's initial column on Ozy
https://www.nytimes.com/2021/09/26/business/media/ozy-media-goldman-sachs.html
Get full access to Newcomer at www.newcomer.co/subscribe
00:00:00
Hey everyone. This is Katie letting you know
00:00:02
that we're showing this week's dead cat episode a few days.
00:00:04
Earlier than usual it's an interview that Tom and I did on
00:00:08
Friday with Ben Smith of the New York Times about three hours
00:00:11
after we finished recording Ozzy media.
00:00:14
The company that we discussed at length announced that it was
00:00:17
shutting down following a series of stories kicked off by Ben's
00:00:20
great reporting. So, when we talk about things,
00:00:24
like the future of Ozzy that future was about to be
00:00:27
announced, not long after we ended the interview.
00:00:30
Without further Ado, here's the show.
00:00:47
We are here with Ben Smith. My esteemed New York Times
00:00:50
colleague, he used to run the BuzzFeed news room.
00:00:53
He's compared to be a media columnist.
00:00:55
He has broken news as a columnist, and over the past
00:00:59
couple of years, but probably no story that's been bigger in the
00:01:03
world of people who care about media are extremely tiny Niche
00:01:07
than the story that he wrote earlier this week on Ozzy media
00:01:11
company. That most people have probably
00:01:13
not heard of that's run by an extraordinarily charismatic, man
00:01:16
named Love's Watson and he had an extremely, I would say
00:01:21
dramatic tale of how Ozzy in the midst of raising its money.
00:01:25
Had one of us Executives pretend to be an executive at YouTube in
00:01:29
order to fool bankers at Goldman Sachs into giving the company 40
00:01:33
million dollars, it does sound a lot like Securities fraud to me.
00:01:36
I'm just sitting over here. Somebody, who covers the justice
00:01:38
department? It does, it does have that ring,
00:01:40
which is probably why the federal government is now
00:01:43
investigating Ozzy. And Ben is here with us today.
00:01:46
Today to talk about this story to talk about what it means for
00:01:50
start-up media startups, which used to be incredibly hot and
00:01:53
now are looking less. So and sort of anything else
00:01:56
that's on his mind, been thank you for being with us.
00:01:58
Well, thank you all for a thanks for having me and yeah, actually
00:02:02
it's funny. I really thought the Aussie
00:02:03
store would be something that only people in our tiny corner
00:02:06
of the universe had any interest in which did not not turn out to
00:02:09
be the case. What's been so interesting about
00:02:13
Ozzy, is I covered that space. I probably wrote, you know, as
00:02:16
much About that whole industry as anyone like kind of the
00:02:19
digital media companies that all took off around the same time,
00:02:23
Ozzy was always a bit of an outlier to me, I would hardly
00:02:26
think about them in that group, you know, to me it was always
00:02:29
the company that was largely in my mind, that's probably not
00:02:34
true, but largely funded by Laurene.
00:02:35
Powell jobs is, you know, investment vehicle, Emerson
00:02:39
Collective, but I mean, been you were at BuzzFeed for a long time
00:02:44
and kind of came up with that class of companies like What,
00:02:47
what was Ozzy to you like? How did it kind of live in your
00:02:49
mind as one of the members of the cohort?
00:02:54
I mean I think it was always mostly kind of puzzling like a
00:02:58
you just knew that no one was reading it.
00:03:00
Obviously. And in 2017 we did a story about
00:03:04
how they had or how to the agency was not totally clear who
00:03:09
had done it, but a lot of fake traffic was being delivered to
00:03:13
Ozzy advertisers and Kind of made sense because they had no
00:03:18
real traffic but they had a lot of advertisers and they just had
00:03:20
no, I couldn't, they didn't have an audience.
00:03:22
And I'm you said, it seems like you have an audience, they be
00:03:24
like, well, our audience are Outsiders, not assholes like
00:03:26
you. It's like you know fair and then
00:03:29
Carlos has this incredibly sort of always on dealmaker kind of
00:03:36
charming garrulous guy who knows everybody?
00:03:38
And sometimes you know you're fun to talk to you about what
00:03:41
was going on in the industry. Yeah.
00:03:43
How would you describe Carlos? I went with, this is something
00:03:45
it's only now. Urging in the subsequent stories
00:03:48
that have come out, since you wrote your First Column, what is
00:03:51
he like as a person when you speak, when you would speak with
00:03:53
him what was he like I mean a very you know I mean I you know
00:03:56
I think like I'm not sure I want to speak for myself to different
00:03:59
people have different impressions of him but I think a
00:04:01
lot some people thought he was this incredibly charismatic.
00:04:04
Brilliant figure of some people thought he was a great sales
00:04:07
guy. Some people felt like he was a
00:04:08
sales guy who liked was trying a little too hard and say, those
00:04:11
were the three Impressions. It seemed like the business with
00:04:15
Ozzy, because, right? No one would ever.
00:04:16
Send Ozzy articles. I don't think in my entire time
00:04:19
covering that space, I wrote one about them or ever read an
00:04:23
article about them, but it seemed like their kind of
00:04:26
Flagship business was this conference that they did the
00:04:29
Ozzy Fest, right? And they would get really big
00:04:31
names, people like Hillary Clinton or, you know, high
00:04:36
level. I don't know Executives or
00:04:39
people politicians would show up at this thing.
00:04:42
I mean, in one sense, I imagine his Charisma and his You know,
00:04:47
ability to build an image of what Ozzie is probably help get
00:04:52
those people to come, right? Like, that's, that's a fairly
00:04:54
fair trade of, you know, for Prestige and image for
00:04:58
appearance, right? Yeah, I mean, I do think that
00:05:01
his relationship with Laurene Powell jobs was this incredibly
00:05:04
validating thing and that he you know, it's not that he sort of
00:05:08
egregiously traded on it any more than anybody else that
00:05:11
industry trades on things. But but the fact that she was
00:05:15
his investors she and Ron Unwittingly recency, negro
00:05:18
three. If you're interested, the 2013
00:05:19
in Silicon Valley, those are like the three investors you
00:05:22
would most want. We're his three sort of startup
00:05:24
investors was incredibly validating and I think also that
00:05:27
people wanted to get any you know, she has she represents
00:05:30
just this massive pile of money to people and so I think there
00:05:33
was like a well if he's close to to Lorraine, no harm doing them
00:05:38
a favor and you know I do think there's an element of in which
00:05:40
like right now, everything is sort of the politics of Royal
00:05:43
courts of billionaires and like half the sort of talented
00:05:46
people. Of my generation.
00:05:47
I know one way or the other just sort of work for billionaires
00:05:49
and are constantly worried about their position, relative to
00:05:52
other, courtiers in their courts.
00:05:54
And like, I think that's sort of, also part of this, you here
00:05:58
up. He was sort of one part of this
00:06:00
extended Royal jobs court and so people were who were looking to
00:06:04
get to her. So I was potentially a way for
00:06:06
that, although and I think he didn't, he benefited from that
00:06:09
all. I don't think he, at least in
00:06:11
the early days overly represented himself as that.
00:06:14
I think they are real friends. So were you Rise at all by her
00:06:17
response to the story, the statement she gave I I read it
00:06:21
as her distancing herself from him.
00:06:23
Maybe I've misread that but it did not, it certainly wasn't a
00:06:27
statement of support. I mean it was certainly Andrew
00:06:30
Cuomo, distant. I mean, of sorry.
00:06:33
Certainly Emerson distancing itself, I don't know if it was,
00:06:39
I don't think. I mean, I the way I read it, it
00:06:41
was Emerson discussing self, but I think almost very much not
00:06:46
Lorraine distancing herself. I love this idea of media
00:06:51
becoming especially startup media becoming a game of which
00:06:54
billionaire which benefactor, which wealthy benefactor can you
00:06:58
find ya some sort of Medici era type game of, you know, which
00:07:03
random rich person will give you money and legitimacy?
00:07:08
Yeah, well I think you definitely see that impulse
00:07:10
coming from the billionaire. As I mean something like a Marc
00:07:13
benioff buying Time Magazine there.
00:07:16
Has no business value for him. I mean, I don't even know what
00:07:18
Time Magazine is at any point. But I think you know post Jeff
00:07:22
Bezos, you know buying the Washington Post and doing a
00:07:25
pretty good job with that and then you know, Laurene Powell
00:07:29
jobs, buying the Atlantic. Yeah, I guess like the flip side
00:07:32
of that would be what's-his-name the Facebook, billionaire, who
00:07:35
bought the new Republic and like, did horribly owning that
00:07:39
like, yeah, I don't know. I just imagine that week with
00:07:41
the great accrual of wealth and billionaires status in this
00:07:45
country. They feel some Obligation to
00:07:47
help these kind of, especially Legacy Media companies.
00:07:50
I mean, the Ozzy thing feels a little different because it's
00:07:52
like they're tapping into the next thing, right?
00:07:55
It was part of this whole class of companies like Mike and and
00:07:58
fusion well you know I think the thing is there were I think that
00:08:02
there were, you know, there were a handful of companies that had
00:08:07
built real audiences and we're making sort of real connections
00:08:10
with people. And I would say that Vox was
00:08:13
BuzzFeed was and just worried, you know, Then a bunch of like,
00:08:17
you know, Upworthy had a big real audience for a while.
00:08:20
Could have bottom of the internet places, like, 9gag
00:08:22
really did. And then there are other
00:08:26
companies that raise money saying, we're going to be like
00:08:28
those companies, but but they didn't actually, you know, ever
00:08:36
build the audience but there were telling us, you know, but
00:08:38
they thought they were. I don't think I don't think.
00:08:39
I don't think Ozzy launch imagining that it wasn't gonna,
00:08:43
you know, the launched is a scam or anything like that.
00:08:46
Right, right, well, it's interesting, the like fake it
00:08:49
till you, make it Tech mentality, you know when it goes
00:08:52
wrong because like at the same time we've got the Elizabeth
00:08:55
Holmes trial happening at the moment and a lot of people are
00:08:59
making the same comparison between, you know what you wrote
00:09:02
about with Ozzy and Elizabeth Holmes.
00:09:04
Which I mean I don't know, I mean if we are talking about
00:09:06
Federal investigations it's not that crazy of a comparison but I
00:09:10
think the hope is like if you can string people along with
00:09:13
your hope of what this could be, then eventually the Complicated
00:09:16
shit will work itself out and to a degree.
00:09:19
I mean, like with their announced that seems insane like
00:09:22
much more insane. You're talking about, actually
00:09:24
think, like, you think this is more?
00:09:27
Because I think you can do with media, you know like what's the
00:09:29
what is traffic right? It's just whatever comes for
00:09:32
says, I mean they're all made up numbers you know I guess I don't
00:09:35
know. Maybe maybe that's true too true
00:09:36
where you worked but that's that has not been my experience.
00:09:38
Like I think you know, you were it business instead of right now
00:09:41
is like trying to convert people real people to pay for the stuff
00:09:44
and And yeah, I don't know. I mean, I guess maybe I'm a
00:09:48
little prickly about this because we were best.
00:09:50
People would often say things like, well, are you just buying
00:09:52
all this traffic from Facebook and it's like, wait, are you
00:09:54
crazy? Of course, for not like it's
00:09:56
really hard. We're trying to reach people,
00:09:58
right? And but here's my point and I
00:10:02
think we say and the other things I think with their
00:10:03
enough. So you know, I did some point
00:10:05
like somebody will invent something where you can have
00:10:07
somewhat less blood in the vial and and still be able to get a
00:10:12
diagnosis of, you know, various conditions from that blood It
00:10:15
wasn't a crazy idea that you did bit like going to a Quest labs
00:10:19
and having the like extract a gallon of blood from your arm
00:10:21
after you wait for 45 minutes wasn't necessarily going to the
00:10:24
Future. And I think they probably went
00:10:26
in thinking that they were going to solve it and you can actually
00:10:28
imagine a scenario, right? We're like six months before
00:10:32
Kari recalls they're like acquired by Walmart and Walmart,
00:10:36
takes that team and then somebody in that team actually
00:10:38
figures that out, right? Like I don't think I think that
00:10:40
most of these con, when I'm not want to call any of these people
00:10:43
kind of met, it's all kind of alleged, but I think Usually,
00:10:46
they're also deceiving themselves.
00:10:49
Hmm. So do you think that?
00:10:52
Do you think that what happened with Ozzy based on your
00:10:55
reporting? Do you think what happened with
00:10:57
Ozzy? Is something that has that feels
00:10:58
applicable to to the larger sort of startup media space where,
00:11:02
but for the grace of God, we could have all been there or do
00:11:06
you think that there is something particular about
00:11:07
Carlos and particular about this company?
00:11:09
Clearly impersonating, YouTube executive is far more extreme
00:11:14
than I think what most people be willing to do.
00:11:15
And I think what they were doing with their traffic was also like
00:11:18
the car Watson show didn't have an organic audience.
00:11:21
It was all Arbitrage where they were selling at premium rate ads
00:11:25
and then taking a lot of that. Money and buying you are buying
00:11:27
YouTube pre-roll for the show. I mean, it was just all paid.
00:11:31
There was no very little organic.
00:11:33
So I mean, some of it was sort of well, maybe it's all the
00:11:36
stuff is on a spectrum. And this is way down the
00:11:38
Spectrum, but it's like way down the Spectrum.
00:11:40
It's an order of magnitude, more deceptive.
00:11:43
I think, than what most media companies were doing.
00:11:46
I'm going to do think if you look at how Vice talk to these
00:11:48
to talk about it, It's traffic. There's an example of a website
00:11:53
that did not have very much traffic.
00:11:54
The pretended to have a lot of traffic, that's not really just
00:11:57
similar. That's the only analogy I can
00:11:58
really think of. And the thing is right, like so
00:12:01
much of kind of the real money in this business is in
00:12:03
television and the notion that you build a brand real or fake
00:12:07
on the internet and then flip it into TV, makes certain amount of
00:12:10
sense. And maybe actually it's easier
00:12:11
if it's fake because it's not so messy.
00:12:14
You don't feel like interact with reality, right?
00:12:17
But that's that's the fake it till you make it meant.
00:12:18
Leti, right? It's like if you can convince
00:12:20
enough people that you have a brand that you have an audience,
00:12:23
eventually someone with real money and someone who can put it
00:12:26
in front of an actual audience, will, you know, will bite, and
00:12:29
then you sort of done it right? Then you flip that.
00:12:32
I mean, like Vice is such a great example because they are
00:12:35
trying to be more of a television company, and they
00:12:38
have a cable network, which is insane for a, you know, a brand
00:12:41
that's aimed at Millennials that most don't pay for cable, but
00:12:45
they're making a, you know, money from that like that,
00:12:47
there's a billion exaggerator. I mean, if you compare
00:12:49
breastfeed and vice one, looks like it's going to exit and
00:12:52
deliver for investors in one looks like it's not going to and
00:12:55
so you know to defense point is that you can take to make it
00:12:59
until ultimately you have to deliver and what Aziz been doing
00:13:01
and trying to raise money. It looks like is simply trying
00:13:05
to find a way to have some sort of logical exit and buying time
00:13:09
until that moment. And so I don't know, like Ben
00:13:12
aren't Tom. You guys, I never covered media,
00:13:15
you know, do you feel like it's the exit?
00:13:18
The hard stop where you can no longer pretend.
00:13:21
I mean this case it wasn't that it was the college Securities
00:13:24
for us that is also a time to stop.
00:13:28
Yeah. Right.
00:13:30
Yeah. I don't know.
00:13:32
I mean I do think yeah and I don't know I think he's like I
00:13:35
think there are lots of great businesses that did really good
00:13:38
stuff and didn't get the quote unquote, exit and lots of
00:13:40
garbage companies that sold for a lot.
00:13:42
I realize like Silicon Valley. The founders are all focused on
00:13:45
their exits like particularly the bad ones.
00:13:46
Actually, I think Ink. But yeah, I know, actually I
00:13:51
think if you look back like at all the media companies that big
00:13:55
media companies acquired most of them no longer exist in any
00:13:58
form. And so I don't think I don't
00:14:00
think that the sort of notion that they sold is a validation
00:14:03
that they were real or fake or than anything else.
00:14:07
I mean, depends how you're looking at it and from whose
00:14:09
perspective, you know, if you were able to exit your, you
00:14:12
know, and get some payback on your shares.
00:14:14
But but I mean back to Asia, specifically what I would like
00:14:17
so much about your story was that you have this incredible
00:14:21
anecdote about the, you know, impersonation of a YouTube
00:14:25
executive that obviously you know was what got it so much
00:14:28
attention, but the large portion of your story is just pointing
00:14:31
out things that anyone who would follow this company and was
00:14:35
aware of how the media industry Works would.
00:14:37
I thought it would have suggested which is like when
00:14:40
they're claiming they have 25 million uniques.
00:14:42
That's more than most companies that have way more brand
00:14:45
recognition have when they're claiming they have tens of
00:14:48
millions of emails, on their list, compare that to morning
00:14:52
Brew which is one of the most popular daily newsletters.
00:14:55
They have three million and you know, there's no you don't need
00:14:59
to get, you know, deep internal files to determine that.
00:15:03
It's just basic common sense and I think that's what people
00:15:05
forget, so often. In the media world is that you
00:15:08
can make these claims. But anyone with a modicum of
00:15:10
understanding with know what smells bad.
00:15:13
Yeah. Yeah.
00:15:14
I think that's right. And, and, you know, anyone with
00:15:16
a modicum of understanding, much less, all the richest.
00:15:19
Brilliant most brilliant people in the world which perhaps
00:15:22
suggest that they are not the Geniuses that they purport to be
00:15:25
your money. Doesn't confer intelligent
00:15:27
attention good. So you mean by the way I don't
00:15:33
know how much you got into it in your story but do you think if
00:15:36
this Euler, you know Scooby-Doo moment with Alex Piper at
00:15:41
YouTube, hadn't happened, I hadn't you know been you know
00:15:44
spoiled by the rotten kids that golden would have invested.
00:15:47
I mean is there a world in which they're able to get through that
00:15:50
moment and the 40 million dollars?
00:15:51
They were expecting it from Goldman actually goes through
00:15:53
and they could kind of continue this escapade.
00:15:57
Well, you know, they did what they did raise around it, just
00:15:59
didn't come from Goldman. Do you think that's imperiled
00:16:03
now? I mean you applied your in your
00:16:05
story that it was going to happen but like everyone is Rats
00:16:07
from a ship, it happened because they did raise the money.
00:16:10
Yeah I mean I think that if you were an investor Who bought in
00:16:18
and if and again I'm not, I'm sort of reporting on all this
00:16:21
and I'm not sure exactly what's the case and if the company did
00:16:25
not inform you that they were being investigated by the FBI
00:16:28
for alleged Securities fraud, that might be a kind of material
00:16:32
issue that would trigger you to potentially fire a lot file, a
00:16:36
lawsuit, or something like that. Like you were specifically
00:16:38
sketching really background? Yeah.
00:16:40
You certainly want your money back and you probably could get
00:16:43
companies. Blows up over something that
00:16:45
you'd be totally, new event should have told you, I don't
00:16:48
know. Katie, what do you think?
00:16:48
Will they get it back? I think that oftentimes, there's
00:16:51
a like a SharePoint, some sort of material change in the
00:16:54
company being under investigation.
00:16:56
Knowing it not disclosing, it could fall under that and
00:16:59
depending on how the money is distributed.
00:17:02
Some people, you know they say they're going to invest but they
00:17:04
haven't wired the money over yet.
00:17:06
They could put a stop to it. They could kill try to claw
00:17:08
money back. What's so interesting to is, I
00:17:10
think this calls into question how much money is really left
00:17:13
inside. The company and if the company
00:17:16
were to collapse, who would get money back and how much I mean I
00:17:20
would, it's not clear from the stories but I'm not sure if do
00:17:23
you have any reporting to the suggest you?
00:17:26
How money is being used? I thought that your follow-up
00:17:28
story on Brad bus, he was really interesting because it was such
00:17:30
a high expense production. They were putting on supposedly
00:17:34
for any is so that's like so so so expensive, like the money,
00:17:38
they were burning was so intense.
00:17:40
All again toward something that wasn't true right?
00:17:43
Carlos Watson. To tell people it was for a any
00:17:46
it was never for a any. And then you have an executive
00:17:48
actually telling people. This is not only building your
00:17:51
company on likes and it's incredibly bad and all these
00:17:55
other ways. So, you know, viewed to
00:17:57
questions, you have reporting on, you know, how much money
00:18:01
remains at the company, giving given High burn rate and then to
00:18:05
the Brad Bessie incident is fascinating, did you get a sense
00:18:09
from Bessie? After he confronts the founders?
00:18:12
It seems maybe he was confounded.
00:18:14
Their response that it was no big deal.
00:18:15
And, you know, do you have more insight on that because they
00:18:19
kept moving forward and we're going to make it work and he,
00:18:23
you know, quit and did other employees contact him.
00:18:27
I mean, he was so open about it that they were all being lied to
00:18:30
did. He was there an exodus that
00:18:32
followed him? The thing is to do television
00:18:35
production. It's just so much work, and they
00:18:36
were like 100 Ozzy is in kind of crazy.
00:18:39
Is that even while they were misleading people, they were
00:18:42
also producing really expensive to produce.
00:18:44
Reduce technically high quality content.
00:18:46
So if you're like the post production supervisor, you're
00:18:49
just you're right. You are in fact, putting out a
00:18:51
show all the time and it's covid and you're employed and the
00:18:55
checks are clearing. And so I think all those people
00:18:57
were like, I, this is insane, but I'm getting paid basically,
00:19:00
and do you think the checks are going to continue to clear?
00:19:06
You know, I don't know. I mean, I think the question of,
00:19:08
you know, it's not even clear that the companies really has a
00:19:11
board the end. It was a solution version Market
00:19:14
which is Marc lasry, and Steen company.
00:19:19
They were still representing as a board member and they say,
00:19:22
Loretta is a board member. There Lorraine is no longer a
00:19:25
board member, she's listed as one hand, interesting.
00:19:28
And, and so, I think the only remaining board members as of
00:19:34
this recording our Arliss and Michael Mo mgsv but Mo isn't
00:19:39
returning my calls but it's just not clear.
00:19:43
I don't know what happens. Now, it seems like it'll involve
00:19:46
a lot of lawyers. I thought Marc lasry statement
00:19:49
was so interesting that he didn't have a lot of experience
00:19:52
with investigations and controversy.
00:19:54
So he wasn't really the right person, but he was on the board
00:19:56
of the Weinstein Company during the very months, when Jody
00:20:02
Cantor and, you know, all these other Reporters were calling him
00:20:07
and all the other he's familiar with crisis.
00:20:09
Yeah, absolutely already with Craig has steel that and tweet
00:20:13
it because that's in said, you know, would you first reached
00:20:16
out to the board and said I'm writing this story?
00:20:18
And it was clear that they knew what had happened in February.
00:20:22
In the year of Our Lord 2021 was it weird to you that there had
00:20:26
not been an internal investigation.
00:20:28
They seemed so sanguine about this last three spoke for the
00:20:32
board and I thought it was totally bizarre.
00:20:35
And I think the The yeah, I mean I really seem strange to me than
00:20:39
anybody. I talk to about it that you
00:20:40
wouldn't. I mean, really just to cover
00:20:42
yourself as a board. And that's I mean ultimately a
00:20:45
lot of the way that these corporate actors Act is to
00:20:48
protect themselves and actually kind of shocking.
00:20:52
They wouldn't investigate and to protect themselves from other
00:20:55
investors. Among other things.
00:20:56
Like I just Yeah, it seems really strange rolling back a
00:21:01
little bit on this. I mean, as someone who worked
00:21:03
in, you know, in the digital media sphere, you know like I
00:21:07
mentioned like the cohort in which, you know, Ozzy came from,
00:21:12
what was it that Drew you to wanting to write about them?
00:21:14
Me, I'm imagining you'd heard about the Alex Piper incident
00:21:17
and that's just such a juicy story.
00:21:18
You've got to confirm it, but was it one thing about like can
00:21:22
I track this one? Anecdote down?
00:21:24
Or is it like yeah. What is the deal with Ozzy?
00:21:26
Because it's so that's amazing. I'm a very tip driven reporter
00:21:29
to be totally honest. Like I, yeah, you know, I like I
00:21:32
sort of know what as he is and sort of always was like and but
00:21:35
you're not going to write a story that's like this company
00:21:37
you've never really heard of isn't exactly what it seems
00:21:40
like, who cares? Well, especially if you don't
00:21:43
care about the company that they nobody hears about it, right?
00:21:45
Because it doesn't have any real audience.
00:21:47
So like who am I writing for? So I that's why I wouldn't
00:21:50
really have thought of everything but as a but that I
00:21:53
mean, that Goldman thing is one of the craziest things I've ever
00:21:56
heard. So it needs and wants Able to
00:21:58
track that down. I sort of was like what's a
00:21:59
What's Happening Here impersonating.
00:22:02
Another person in order to get 40 million dollars.
00:22:04
If it happened is definitely, it's just, it's just such a
00:22:09
literal secure. I mean, it's just like, yeah,
00:22:11
it's such literal fraud but also like so ham-fisted and so sane,
00:22:17
you know, I suppose somebody just like in a dupe Goldman and
00:22:21
I'm, it's incredible. I mean, I'm sure you've had
00:22:22
these conversations to I spoke with somebody who, I mean, I
00:22:25
used to cover Wall Street so you know who was like Oh yes.
00:22:28
Spoken to one of the people on the call and they knew from the
00:22:32
minute, they got the Gmail address.
00:22:34
That something was weird. And then the therefore, the
00:22:37
flood lights are like, what the heck.
00:22:40
So like who, who, who in their right Minds things?
00:22:45
I can I can do this. I can get away with this.
00:22:47
That's the other you said with right mind yes they had been
00:22:51
telling all these stories at particularly about their
00:22:54
relationship with YouTube. And then Goldman says, we want
00:22:58
On to talk to you, too. And so I think I don't think
00:23:01
it's I think they were in a bit of a corner, you feel like it
00:23:04
was the first time somebody to actually set like check to their
00:23:07
work. I've no idea if it was the first
00:23:08
time they that they did something like this or not, they
00:23:10
say it was, but I do think the reality is they had talked up
00:23:14
this relationship, they didn't really have and so suddenly,
00:23:18
they're very flat, very close, I think.
00:23:20
Or they think they're very close on this investment.
00:23:22
There's some last questions from Goldman Goldman, emails and
00:23:25
says, hey, we'd like to talk to YouTube and maybe another of
00:23:28
your partner is one of these other guys.
00:23:29
Guys and suddenly it's like, frightened Toby.
00:23:33
Didn't think dammit. Think what do we do?
00:23:34
I don't know. And I think like You know, these
00:23:38
things you can sort of, I guess, I sort of think that it's pretty
00:23:40
relatable that you for people that you tell some little lie
00:23:44
and get the gets deeper and deeper and deeper.
00:23:45
And I think that's kind of what happened here.
00:23:48
Sure. But there's also the story that
00:23:50
people want to believe that got Ozzy to hold and to be clear, I
00:23:52
have never done anything like, you know.
00:23:55
Yeah. Well, typically, you know, if it
00:23:58
crosses your mind, you you, you know, you cross it out, you
00:24:01
know, like the first you're like, well, we could pretend to
00:24:03
be Alex Piper and then you move on.
00:24:06
But Like back to like you know the nature of the scam, I think
00:24:10
the reason you know an Asia itself.
00:24:12
The reason that it had so much purchase with investors is
00:24:15
because I think a lot of them wanted to believe it.
00:24:18
You know, if you look at Elizabeth Holmes and the mark
00:24:20
that she had, when she was able to raise money, she would get
00:24:23
this money from older men who wanted to feel like they were
00:24:29
backing a female entrepreneur. And, and maybe they felt like
00:24:32
they were a father figure to her.
00:24:35
Maybe I'm being very generous with this, but But it was a way
00:24:38
to like, generous, and like they were rooting for a woman and
00:24:44
start up because there aren't a lot of this.
00:24:47
Right now, I know. I sorry.
00:24:48
I, when I say generous, I mean they're actual feeling, and I
00:24:51
know, but I'm saying like there's yeah, I mean, I think
00:24:54
good these things always sort of hold up a mirror to society, in
00:24:58
a certain way rice. It was fascinating that you had
00:25:01
two people talk about wanting to work with Ozzy because they felt
00:25:04
this sort of social Awakening after the death of George Floyd.
00:25:08
Or they saw this social Awakening around race in
00:25:10
America. They want to be part of it, and
00:25:11
they felt that Carlos presented them this way.
00:25:14
And, and, and that is He represented that to them, he was
00:25:18
like an easy answer to them, it's like they felt guilt over.
00:25:20
The fact, there aren't that many minority LED media companies out
00:25:24
there. And here was someone willing to
00:25:26
fill that particular Niche for them in a way that it's just a
00:25:29
very effective pitch to a certain type of person and
00:25:33
allows them to probably look the other way when any other
00:25:35
situation would have been like yeah I don't think these numbers
00:25:38
really add up and it's does that make sense to you at all or
00:25:41
totally into the Ford Foundation?
00:25:44
Said it to me directly but they were so excited to invest in a I
00:25:47
mean, I found it sort of depressing.
00:25:49
Honestly, the way he put it, which is that this company
00:25:51
showed that black LED companies like like will certainly be
00:25:56
great and it's like, well actually a lot are like there
00:25:58
are a lot of great black media printers but you sort of didn't
00:26:02
bother checking, whether this was one of them.
00:26:04
I mean it's and I do think it's also you know, Carlos is
00:26:09
politics were very unthreatening.
00:26:11
He's sort of, you know, his sort of basic point of view on the
00:26:13
world. Is that like if only Republicans
00:26:16
Democrats Talk more and have more nuanced conversations that
00:26:19
everything would be better. And that's like a and you know,
00:26:22
like it's a very Silicon Valley investor friendly point of view
00:26:26
on the world. It's not, we need to shut down
00:26:29
Facebook and take all your money, right?
00:26:32
So well, that would be quite a media company.
00:26:37
So I guess my last question is, here would be like, I mean, the
00:26:41
Aussie story because it is so crazy, and involves such, you
00:26:45
know, outlandish. Feats an axe, is there anything
00:26:48
really? We can learn from it.
00:26:50
You know, I mean, sometimes I think is so exciting.
00:26:52
Honestly, like, I was in the column.
00:26:54
I gotta write so I don't know. Stay tuned if you have any idea.
00:26:57
Okay, thank you. Yeah, Donna exacts.
00:27:01
I put that right over the top. Yeah, we do a better job at it.
00:27:04
I mean, I don't know. I guess you'd have to start
00:27:07
drawing conclusions on that whole class of, you know,
00:27:11
digital media companies that came from that era and like
00:27:13
BuzzFeed is clearly proved itself at least to a point that
00:27:16
people keep saying that to me, and as somebody who really grew
00:27:18
up in that, I really don't think that's true at all.
00:27:21
Which look, I think is not true. Like I think a lot, most of it,
00:27:24
I think I'll, you know, most of those companies were real, some
00:27:28
succeeded on the merits, some crashed and burned on the
00:27:30
merits. This was a really unusual
00:27:33
situation. I also think that people who
00:27:36
sort of blame digital media of forget half scammy, the media
00:27:39
business has always been like, when I was the perfect Sam's on
00:27:42
a great print newspaper. I believe one of our Marketing
00:27:45
Executives was charged for telling advertisers that we were
00:27:50
printing a gazillion paper is and we were In fact, not and
00:27:53
they were dumping the extras and empty.
00:27:55
Lots. So you know, the a deterministic
00:27:57
magazines, juicers, Elation, always.
00:28:00
Yeah. Yeah, circulation.
00:28:01
Fraud is a very old. It's real deep when I worked at
00:28:05
times a week. But it's the perfect fraud
00:28:10
because usually unless your fleece and Goldman Sachs and
00:28:13
investors the victims are advertisers, how much do they
00:28:16
really care? You know, like they're willing
00:28:18
to believe a lot of things when it comes to Roi or traffic or
00:28:22
the effectiveness of ads. So like there's sort of like a
00:28:24
tacit agreement on the part of some media companies.
00:28:27
Advertisers to say like hey the numbers say what they say maybe
00:28:30
it helped increase sales, maybe it didn't but you got to spend
00:28:32
the money somewhere and that well it also there's a bit of a
00:28:36
conspiracy to cover. Stuff up because the agency is
00:28:39
don't. Who often are the ones who are
00:28:41
supposed to have their eyes on the, on the wheel didn't.
00:28:45
And they don't want to tell the advertisers they screwed up so
00:28:48
often. If they, if an agency discovers
00:28:51
that they've been scammed, they will maybe they'll make it right
00:28:54
or they'll move the money somewhere else.
00:28:55
But they're not going to go to the CMO and say, hey, by the
00:28:58
way, you hired us to spend your money effectively and we're
00:29:00
morons. Yeah, so maybe this is just a
00:29:02
case where it's just, you know, the ending of Burn.
00:29:04
After Reading like, it's just JK Simmons saying like, Well, I
00:29:07
guess what we learned is to never do it all again.
00:29:09
What do we learn Palmer? I don't know.
00:29:11
Sir. I don't fucking know either.
00:29:16
I guess we learned not to do it again because I don't know, I
00:29:19
don't know. Well, we will be looking for
00:29:21
your next column. Thank you for coming on.
00:29:23
We know you're busy, you're drowning.
00:29:25
So we appreciate. Thanks for uh, thanks for having
00:29:27
me. It's nice to see you guys.
00:29:29
Yeah, thanks Ben. Bye.
00:29:40
I think that then definitely. I mean clearly he has a view on
00:29:44
Ozzy, he wasn't He wasn't withholding of it but I did
00:29:53
think it was interesting how you know, he he wants to separate
00:29:58
Ozzy from the rest of kind of this like online news startup
00:30:03
world and I'm wondering if he's right to do that.
00:30:06
Like I don't actually like having not covered the media
00:30:08
myself. I don't have like info an
00:30:10
informed opinion, but what do you think of that?
00:30:12
I think it. I think it is an interesting
00:30:15
comparison. Because he's right.
00:30:17
BuzzFeed is a real business they have made hundreds of millions
00:30:21
of dollars. They have a diversified Revenue
00:30:23
stream, their financials are all out there.
00:30:25
Like they have a very plausible SPAC that they're putting
00:30:29
together. But I also think that to say
00:30:33
that there is a world of difference between, you know,
00:30:37
it's like Ozzy could have been in the BuzzFeed mold if it had
00:30:41
gone a slightly different direction, you know, you can
00:30:44
convince enough advertisers you Convinced enough decent
00:30:47
reporters to work for you. You can convince enough
00:30:50
celebrities to do appearances at your conferences that you build
00:30:53
a real business. I mean like that's the make it
00:30:55
part of the fake it till you make it, you know, you don't
00:30:57
have to just keep faking it until everybody, you know, just
00:31:00
agrees to make you too big to fail, like, you can at some
00:31:03
point turn it into a legitimate business.
00:31:06
And so, you know, maybe there is something rotten at the core of
00:31:11
Ozzy that made it. So, it was inevitable, that it
00:31:13
was end up this way. Or, at some point, you kind of
00:31:16
like, Wake up and say, all right, we have these connections
00:31:19
with, you know, Hillary Clinton and Steven Pinker.
00:31:22
I don't know who I, you know, shows up at their conferences
00:31:24
and we have advertisers coming to us saying we can reach an
00:31:30
audience, that's hard to reach in a cool and formed, you know,
00:31:35
politically active way. And let's hire and they did
00:31:39
hire, you know, legitimate reporters from BBC, and, and
00:31:42
other outlets to do things. And at some point, you kind of
00:31:45
make the turn, you know, You, you turn straight and you build
00:31:49
a real business and my guess is that maybe is what Ozzy was
00:31:53
expecting. It's like we just get this
00:31:54
Goldman money. Yeah, we will have pretended to
00:31:57
be all exclaiming reminds me so much of Bernie Madoff and so
00:32:00
many ways. Obviously did spiral out of
00:32:02
control like that and result in like the loss of Fortunes for
00:32:06
countless people. But just that idea, you know,
00:32:09
that that, that made off at first just it wasn't his intent
00:32:15
to run upon, right? You really did think he put the
00:32:17
money back in until it just kind of spiraled out of control.
00:32:20
Yeah, and it's you know, it's funny been making the comparison
00:32:23
of like I really thought Elizabeth Holmes, she may have
00:32:25
just sold this whole thing to Walmart and then no one would
00:32:29
have thought that and it's like, well, you still, you still built
00:32:32
a fraudulent company, you still have the technology.
00:32:34
This is a little different but remember Jed.com, hmm.
00:32:38
How that was going to crash and burn.
00:32:39
But there were so many predictive articles about how
00:32:41
Jet.com made no sense and it was their ridiculous.
00:32:44
And like this thing that economics didn't work.
00:32:46
We're going to be Amazon, what a waste of time, what a waste of
00:32:48
investor money, and then they sold to Walmart, right?
00:32:54
And and, and mark Laurie had a, you know, very important role at
00:32:58
Walmart. Still it still does still
00:32:59
doesn't even though jet essentially has been dismantled,
00:33:02
you know, you could argue our Walmart would argue to
00:33:05
shareholders that the acquisition.
00:33:07
Help them in some way and that, even though this, I think it
00:33:10
did, crazy dream. It won't unquote, worked out in
00:33:15
the end for everyone. Yeah, but what's interesting
00:33:18
with the media company is that the Acquisitions are almost
00:33:21
always terrible in my present company because I bought them
00:33:25
all my present company, excluded, brilliant.
00:33:28
Brilliant move. But you know, you look at
00:33:30
something like ulti spying cheddar.
00:33:34
See you just said two hours. I'm like, what are these words?
00:33:36
Altice has a giant cable company and cheddar is John cheddar is
00:33:42
like, kind of a millennial CNBC, which still exists but and it
00:33:45
was deleted. A person who came from BuzzFeed
00:33:49
Ron Steinberg, one of the pret, the president at BuzzFeed very,
00:33:53
very charismatic boy that that solutions that were we can never
00:33:57
use charismatic assassin. John Steinbeck is a great
00:33:59
salesman and I know or that built.
00:34:02
Oh boy, John Steinberg is a talented man.
00:34:06
And very energetic. And he's a force to be reckoned
00:34:09
with you've ever had a conversation with him, but he,
00:34:13
you know, he sold his company. He's now an executive at altice
00:34:16
and I I think they thought kind of bringing him on was a way
00:34:18
that they could make their brand, something that Katie
00:34:20
better was aware of. And, you know, it's interesting
00:34:26
with media because a lot of these Acquisitions just they
00:34:28
just don't go very well. But if you're an investor, you
00:34:31
get an Roi. And I got a think at a certain
00:34:34
point that was probably the thought process.
00:34:36
But you know, is it going to go public is gonna be the next
00:34:39
Disney now, but will someone want to buy it at some point
00:34:43
worth a shot. I actually met Carlos Watson and
00:34:47
Ben Smith in the same week approximately it was while I was
00:34:53
still at fortune. And I was looking for a new job
00:34:55
because I felt like time Inc was really struggling.
00:34:58
This would have been, I think in 2013 or so that's your not a
00:35:02
media report. I am a genius and I thought
00:35:05
timing was struggling in 2013. I don't remember, it's 2013 and
00:35:09
2014, but it was one BuzzFeed was building out its new, its
00:35:12
business news desk and I think that Peter Lauria I'll have to
00:35:17
check that name. Very nice - yeah, it was really
00:35:20
nice, guy. Covered media.
00:35:22
Yeah, covered media at BuzzFeed. Did a really nice job.
00:35:24
I don't think he's a reporter anymore but he's he's great for
00:35:27
great things. Yeah and I knew him from because
00:35:29
we both covered ball straight. He wanted me to come in for an
00:35:32
interview and then somebody to introduce me to Carlos Watson to
00:35:36
see if I'd want to go work at a company.
00:35:37
I'd never heard of called Ozzy. So I heard about this Ozzy
00:35:44
thing. When I met with Carlos it was
00:35:46
Strange interview because he, we spoke about me being a reporter,
00:35:49
which would be the appropriate job for me.
00:35:52
And then he shifted and said, you know, I actually see in you,
00:35:57
the makings of an editor, perhaps a high level editor,
00:36:01
perhaps, even managing editor, perhaps even managing editor of
00:36:05
over half of this year ago sight, out of here.
00:36:10
And I thought that, I mean, even even though, I'm even though I'm
00:36:13
a dimwit, I knew that was a bad sign that I I just love just
00:36:17
throwing human beings into roles who are unqualified.
00:36:19
It's not totally great. So I decided that I probably
00:36:25
wouldn't go to Ozzy and then Peter it set me up with an
00:36:28
interview with Ben and that interview lasted, I think I
00:36:31
clocked it at four minutes much shorter than the Aussie
00:36:35
interview and Ben was pretty pretty straightforward.
00:36:38
He said you know you're coming from the magazine world and
00:36:40
magazine reporters are very, very slow ponderous.
00:36:43
And they are usually pretty like not great.
00:36:46
Beep reporter. So I also didn't get the job at
00:36:50
BuzzFeed, so I was, I was I was I was basically knocked out of
00:36:54
the world of startup, you know, Venture back media.
00:36:58
Unfortunately, I had I had my shot and I wasn't able.
00:37:03
I wasn't able to get in. I wasn't able to.
00:37:04
Yeah, but yeah. It's just I'll just say, they
00:37:09
were really extreme conversations and I think I came
00:37:13
out in the think I came on the middle.
00:37:15
I think it came out. middle, but I think it also speaks to kind
00:37:18
of like how If based on those conversations, I would have
00:37:23
predicted that both companies had ended up approximately in
00:37:27
the places. They are now one struggling to,
00:37:31
you know, establish legitimacy and or, you know, struggling
00:37:36
with accusations of Fraud and then the other with very high
00:37:39
standards doing much better. One of the few companies that's
00:37:43
probably going to get out and have, you know, and hit the
00:37:47
public markets. Yeah, no, definitely the best.
00:37:50
The crop. And, you know, we could maybe
00:37:53
revisit this topic, like a year from now or something.
00:37:55
Because I think I think of all the places that wouldn't hire
00:37:57
me. Yeah, yeah, I think we should
00:38:00
check in that regularly. Oh, I can answer that too but
00:38:05
we, you know, like the the full report card is yet to be fully
00:38:10
submitted. I think on like that whole class
00:38:12
of companies, we obviously have at the bottom, the Aziz I think.
00:38:16
Cause he's like, did not complete but then you have, you
00:38:19
know, your mics and your Fusion, And which kind of failed out and
00:38:23
then we'll Mashable sure. They are still around to a
00:38:27
degree, they got acquired, but for pennies on the dollar and
00:38:31
then, you know, we have BuzzFeed, which is going to make
00:38:34
a good go of it. Like we mentioned Vox, which I
00:38:37
hear is a legitimate, you know, has a real business there.
00:38:40
And then, and then Vice which who the hell knows as we talked
00:38:44
about with Ben, but it certainly didn't turn out how it was
00:38:49
cracked up to be. I think there was an expectation
00:38:51
that they were creating the next Disney's and and the next New
00:38:54
York Times and I don't know and pick your company and it just
00:38:57
didn't turn out that way. And so we've gotten the full
00:39:00
like banquet panoply of like outcomes from the frauds to the
00:39:06
pretty good but no spectaculars. And also I think that the forces
00:39:09
that I've applied, you know, I think the pressures on online
00:39:13
media and on a lot of these startups, these are pressures
00:39:17
that are being felt by You know, by more traditional media
00:39:22
companies if not more. So like yes you can say some of
00:39:27
these things have fallen by the wayside but look at what's going
00:39:29
on in the magazine industry like Conde Nast is still standing but
00:39:33
obviously struggling financially if not not in other ways time
00:39:40
Inc, where I worked a company that I love does not really
00:39:43
exist anymore. No, he's getting chopped up and
00:39:46
resold, it's each publication. Is going to become a standalone
00:39:50
asset, that get sold and traded again and again for The Branding
00:39:54
and then you know, it like business make is part of
00:39:58
Bloomberg. So you've already.
00:39:58
So you saw traditional media also be torn apart by forces
00:40:04
around digital advertising, digital media and and what and
00:40:10
sort of like the D emphasis on the content for a really long
00:40:15
period of time. So you know, we're all going to
00:40:17
come out of this together. In a new place it's not just
00:40:21
digital media will see. And now you're working for the
00:40:24
New York Times. Very traditional media, I'm
00:40:26
working for a company owned by the largest Media company in
00:40:29
Germany and it really just all comes down to newcomer your
00:40:32
heart. These are sold digitalexplorer.
00:40:35
It's just Eric. And some stack just bravely
00:40:39
charting A New Path. Yeah, with that said, Eric
00:40:43
newcomer is returning next week from his vacation.
00:40:46
I'm sure we'll have updates there.
00:40:47
So, thanks for joining. Joining us again and we'll all
00:40:50
be back in it. Goodbye.
00:40:55
So work on Sally, goodbye. Goodbye.
00:41:04
Goodbye, goodbye, goodbye, goodbye.
00:41:07
Goodbye. Joining us again and we'll all
00:40:50
be back in it. Goodbye.
00:40:55
So work on Sally, goodbye. Goodbye.
00:41:04
Goodbye, goodbye, goodbye, goodbye.
00:41:07
Goodbye.