Upstart digital news outlet Messenger is shutting down less than a year after launch

CNN
—

The Messenger, the emerging digital news outlet that has employed hundreds of journalists and promised to upend the industry as a mid-market publication, has announced that it will close its doors less than a year after its landmark launch.

The collapse of the outlet, founded by media entrepreneur Jimmy Finkelstein, represents one of the largest and fastest media failures in recent memory. The closure of Messenger comes just eight months after its debut, which was built on a strategy of generating significant internet traffic from social media platforms and search engines despite broader industry headwinds.

Staff at the outlet learned of its closure on Wednesday from the New York Times, Which broke the news of its demiseA person familiar with the matter told CNN.

In a memo sent to employees Wednesday afternoon, Finkelstein said he had made the “difficult and painful decision to close The Messenger, effective immediately.”

“Over the past few weeks, and until earlier today, we have exhausted all available options and sought to raise sufficient capital to achieve profitability,” he wrote, according to a copy of the memo obtained by CNN. “Unfortunately, we were unable to do so, which is why we have not shared the news with you yet.”

Finkelstein said he was “personally devastated” by the decision and apologized to staff for the site's collapse.

“Economic headwinds have left many media companies struggling to survive,” he said. “Unfortunately, as a new company, we faced greater challenges than others and were unable to survive those headwinds.”

The closure comes amid widespread layoffs in the media industry, with thousands of jobs lost across news organizations in the past year amid widespread advertising and audience struggles. The Los Angeles Times, earlier this month, Newsroom reduced by more than 20%; TIME has cut dozens of employees; And Business Insider said it will cut its workforce by 8%. Meanwhile, hundreds of workers at Condé Nast, Forbes, the New York Daily News, and others staged historic strikes to protest planned cuts at their outlets.

At its launch, The Messenger hoped to employ about 550 journalists — it eventually hired 300 — and boasted that it would eventually reach 100 million monthly readers, an ambitious goal for a new publication.

To achieve its lofty goal, the outlet appointed Nitzan Zimmerman, a renowned traffic expert, as chief growth officer, with the mission of quickly building an audience from social media platforms and Google search to direct and programmatic ad-supported articles. But this strategy prompted some journalists hired by The Messenger to quickly leave out of frustration with being tasked with writing a large number of stories — many of which are low-quality pieces that rewrite other outlets' reporting — in order to meet traffic goals.

By the fall, it became clear that the apostle's financial health was ailing. Former chief executive, Richard Beckman, It said He told the staff that the messenger had “run out of money.” Reports emerged earlier this month that the struggling news publisher was looking to raise about $20 million by laying off dozens of employees.

To raise capital, Finkelstein met with right-wing financiers and held discussions at Donald Trump's Mar-a-Lago resort. One such proposal offered $30 million in financing in exchange for a 51% stake in the company, which was worth about $60 million. In essence, Finkelstein was willing to give up control of his outlet less than a year after launching in order to keep it afloat.

At the time, The Messenger shot down rumors that it was on the verge of collapse, saying it had raised more than $10 million in its latest funding round and would continue to grow revenue while cutting expenses over the next year.

“I'm shocked that we ended up like this, and I'm sorry that the last few weeks have been so torturous,” Dan Wakeford, editor-in-chief of The Messenger, told staff in an email on Wednesday.

“The editorial team built a brand from scratch in a short period of time and achieved our goal of creating an unbiased news brand that is well-suited to the medium, appealing to both insiders and outsiders,” he said.

On social media, employees reacted to the news with a mixture of sadness and disgust.

“All I knew was that if I was going to launch a media startup, I would make sure to rent an entire floor of a skyscraper in midtown Manhattan that was empty 9/10 of the day…until they read about it in the New York Times. books Jordan Hoffman is a writer and senior critic at The Messenger.

“I was just laid off” books James LaPorta is national security correspondent for The Messenger. “There is no parting. Health care will stop. I have to clean out my desk from the DC office.”