Ben Smith, left, and Justin Smith
Semafor, a new digital media company focused on global news for graduate readers, debuted on Tuesday with the intention of bringing transparency and clarity to a news company that its co-founders believe is too polarized.
Semafor has been preparing for its launch since January when it used to be New York Times Media columnist Ben Smith and former Bloomberg Media chief executive officer Justin Smith quit their jobs to start the company. Semafor.com and its mobile site will have a distinctive yellow background consistent with coverage in the US and sub-Saharan Africa. The news company will launch regional and national coverage in the Middle East, Asia, Europe and beyond.
The Smiths, who are unrelated, will draw on more than 20 years of digital media experience to lead Semafor into what it hopes to be a global, profitable business.
Recent sales of Axios (to Cox Enterprises), The Athletic (to The New York Times) and Politico (to Axel Springer) have opened up a path for Semafor to build and sell a company for hundreds of millions of dollars, though Justin Smith said he did I didn’t have discussions with Semafor’s investors about selling it at a specific value. These include Sam Bankman-Fried, founder of cryptocurrency exchange FTX, and Jessica Lessin, founder of technology news site The Information.
Still, ad-supported digital media is a sector notorious for recession droughts and low growth — with many cautionary tales. BuzzFeed Since the IPO, the valuation has plummeted 80%. Vice’s attempt to go public fell through as investors clouded the company’s future prospects. For several years she has been trying to find a buyer.
Semafor’s unique article structure will immediately set it apart from older news publications like The New York Times, The Wall Street Journal, or CNN.com. All articles, with the possible exception of breaking news, will follow a semaform consisting of five sections: The News, Reporter’s View, Room for Disagreement, The View From, and Notable.
Each story gives reporters a chance to speak for themselves about news in a specific section, while also including paragraphs about why their opinion might be wrong. The stories will also include a section that offers a macro/global perspective to limit local bias.
According to Justin Smith, to fix information overload, a major flaw in the current media ecosystem, external media analysis is truncated and found in the Noteworthy section. The “semaform” stems from Justin Smith’s experience managing newsrooms at Bloomberg, The Atlantic, Quartz and The Week, along with Ben Smith’s time as Editor-in-Chief at BuzzFeed News and his time at the New York Times.
It is an evolution of Axios’ distillation of news into bullet points, the “Bloomberg Way” (a style guide that focuses on clarity) and The Week’s emphasis on a wide range of viewpoints.
“We started by isolating and disentangling individual issues like polarization and information overload,” Justin Smith said. “We engaged in meaningful conversations with different segments of users and polled them about some of the ideas we came up with. There was a real sense of frustration, but also wonder, that the core unit of journalism – the article – hasn’t really evolved in literally hundreds and hundreds of years.”
The business plan
Semafor will start as a free, ad-supported media site but will evolve into a paid subscription site in about 12 to 18 months as it gains exposure, Justin Smith said. Although Semafor launches at a time of economic uncertainty when brands are cautious about how they spend on advertising in digital media, Semafor will debut with partnerships with companies including Verizon and Pfizer.
“We are certainly ahead of our expectations on the revenue and monetization front,” said Rachel Oppenheim, Semafor’s Chief Revenue Officer. “We operate in a specific part of the advertising market, which is corporate reputation and brand advertising. While brands are under pressure from a financial perspective, they are also under a lot of pressure to improve their reputation and reach key stakeholders. A hallmark from many of the conversations we’ve had is, ‘I’ve never seen anything like it.’ It was deeply humbling and encouraging.”
Semafor has raised $25 million and shared its five-year business plan with investors, Justin Smith said. It will spend its initial investment and assess how the business is doing before setting firm profitability targets or raising more money, he added.
Ben and Justin Smith named the Semafor company after the word “semaphore,” a visual signaling device that sounds the same in about 35 different languages. The media company starts with around 60 employees, more than half of whom are reporters.
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