Bought Web Traffic and A Fake YouTube Executive: the Spectacular Failure of Ozy

The American media company Ozy 'boasted of a large audience for its general interest website, its newsletters and its videos,' remembers the New York Times, calling it 'a Gen X dream of what millennial media ought to be: earnest, policy-focused, inclusive, slickly sans-serif.' Ozy was founded in 2013 with seed funding from Laurene Powell Jobs, followed by further investments that by 2020 were over $83 million (according to the data service PitchBook).

But the Times reports that something strange happened last winter while Ozy was pursuing a $40 million investment from Goldman Sachs:
Ozy said it had a great relationship with YouTube, where many of its videos attracted more than a million views... That's what the Zoom videoconference on February 2 that Ozy arranged between the Goldman Sachs asset management division and YouTube was supposed to be about. The scheduled participants included Alex Piper, the head of unscripted programming for YouTube Originals.
He was running late and apologized to the Goldman Sachs team, saying he'd had trouble logging onto Zoom, and he suggested that the meeting be moved to a conference call, according to four people who were briefed on the meeting, all of whom spoke on the condition of anonymity to reveal details of a private discussion. Once everyone had made the switch to an old-fashioned conference call, the guest told the bankers what they had been wanting to hear: that Ozy was a great success on YouTube, racking up significant views and ad dollars, and that [CEO/co-founder Carlos] Watson was as good a leader as he seemed to be. As he spoke, however, the man's voice began to sound strange to the Goldman Sachs team, as though it might have been digitally altered, the four people said.

After the meeting, someone on the Goldman Sachs side reached out to Mr. Piper, not through the Gmail address that Mr. Watson had provided before the meeting, but through Mr. Piper's assistant at YouTube. That's when things got weird. A confused Mr. Piper told the Goldman Sachs investor that he had never spoken with her before. Someone else, it seemed, had been playing the part of Mr. Piper on the call with Ozy.
Four people told the Times that CEO Watson later said the voice on the call belonged to Ozy co-founder/chief operating officer Samir Rao and attributed the incident to a temporary mental health crisis. Ozy's chairman of the board called it 'an unfortunate one-time event.'
But in addition the site's editor-at-large — who was fired earlier this year — says Ozy's claims of 50 million unique users a month 'seemed high,' according to the Times:
In 2017, BuzzFeed News reported that Ozy had been among the publishers buying web traffic from 'low-quality sources,' companies using systems that caused articles to pop open under a reader's browser without the reader's knowledge. Ozy said it had been buying the traffic to build its email lists and had not billed advertisers for those views... Ozy doesn't rely on standard measurements of traffic, but the best known service, Comscore, shows nothing close to the company's public claims. According to Comscore, Ozy reached nearly 2.5 million people during some months in 2018, but only 230,000 people in June 2021 and 479,000 in July.

Mr. Watson called the Comscore numbers 'incomplete,' noting they don't include impressions on platforms ranging from social media to television and podcasts.
The Times' story 'triggered canceled shows, an internal investigation, investor concern and high-level departures at the company,' ABC News reported Friday. And the same day the Times delivered one more update — that Ozy was shutting down:
In an article in The Times on Thursday, Brad Bessey, an Emmy-winning executive producer, and Heidi Clements, a longtime TV writer, said Ozy executives had misled them while they were working on 'The Carlos Watson Show,' Mr. Watson's talk show, for the company. Specifically, they said, executives told them that the show would appear on the cable network A&E. Mr. Bessey resigned when he learned there was no such deal in place, and the show ended up appearing on YouTube and the Ozy website.
Also this week: Advertisers including Chevrolet, Walmart, Facebook, Target and Goldman Sachs itself — many of which had been paying for placement on 'The Carlos Watson Show' — hit the brakes on their spending with Ozy. By Friday afternoon, Mr. Watson and the other remaining board member, Michael Moe (another high-profile investment figure, who had published a book called 'Finding the Next Starbucks'), concluded that the company could not recover and issued the farewell statement through a spokeswoman....
The Ozy staff received the news that the company was no more on Friday afternoon.

Read more of this story at Slashdot.