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The company, which last year had big plans to revolutionize journalism, has generated just $3 million in revenue at the end of December.
By Benjamin Mullin
Shortly before the media start-up The Messenger launched last year, its president said the company planned to generate more than $100 million of revenue in 2024. It will need a major turn in fortune to get there.
They generated about $3 million in profit last year, according to two other people with knowledge of the company’s monetary results. And they told potential investors that he only had $1. 8 million in money at the end of December, after wasting about $38 million last year. putting you in serious money trouble.
The operational results of the Messenger, which until now had not been made public in full, underscore the difficulties the company is facing. The founders, who raised $50 million for the creation of the website, first said that their target was political, cultural and sports politics. in the United States, but had editorial and monetary difficulties.
This week, the company will lay off about two dozen employees, including those who were in the field of national politics, science and technology. It is increasing the budget of investors to maintain its operations this year. On Tuesday, Richard Beckman, founder and longtime executive of corporate magazine Condé Nast, announced that he was leaving the company.
Kimberly Bernhardt, a spokeswoman for The Messenger, dismissed the perception that the company is facing “disastrous” money difficulties, adding that The Messenger had posted as much profit in January as it had in all of last year.
Ms. Bernhardt said the company had already raised more than $10 million in its latest funding round. She added that the company was also “planning to introduce events and The Messenger TV” and that its finances would reach break-even later this year.
“The Herald’s profits will continue to increase and its expenses will continue to be minimized throughout the year,” he said.
The Messenger’s troubles highlight the difficulty of starting a media company reliant on digital advertising, which has been the main source of revenue for the company.
The site has struggled despite the presence of longtime media executives among its founders, including Jimmy Finkelstein, whose career has included positions at the helm of The Hollywood Reporter; high-net-worth backers, including Josh Harris, co-founder of personal equity firm Apollo Global Management; and sleuths who enjoy major publications.
The company also had some editorial problems. Gregg Birnbaum, a highly respected political editor, resigned in May after a confrontation with an audience editor at the site. Some members bristled at the call to write articles based on articles published through their rivals.
But it has to gain traction among readers, according to figures from measurement company Comscore. The messenger told potential investors that it attracted 24 million visitors in December, up 24% from last month.
Last year, The Messenger projected just $75 million in profit in 2024, according to two other people familiar with the company’s financials. About $10 million of this projection will come from the television division, which has not yet started.
The company’s prices topped $40 million last year, the two sources said. A large portion of those costs (more than $8 million) came from lease obligations for its buildings. The Messenger has offices in New York City, Washington, D. C. and West Palm Beach, Florida.
The company’s valuation for the existing investment circular is unclear, according to the two people. Axios reported last Thursday that the company will raise $20 million.
Upon hearing the news of the layoffs in the newsroom, many of the company’s workers demanded more transparency from Mr. Finkelstein about the internal messaging formula Slack, it is not easy for an assembly of workers to talk about the company’s monetary situation.
In an internal memo released Wednesday, Finkelstein called the decision to lay off workers “difficult. “
“I perceive this to be complicated and I am sincerely sorry for those affected,” he wrote.
Benjamin Mullin reports on news and entertainment from key corporations. Contact Ben securely at Signal at 1-530-961-3223 or by email at benjamin. mullin@nytimes. com. Learn more about Benjamin Mullin
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