Semafor debuts in a tough media environment | Techy Kings

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Ben Smith, left, and Justin Smith

Source: Semaphore

Semafor, a new digital media company focused on global news for college-educated readers, debuted Tuesday with intentions of bringing transparency and clarity to a news business that its co-founders believe has become too polarized.

Semafor has been preparing its launch since January, when the former New York Times media columnist Ben Smith and former Bloomberg Media Chief Executive Officer Justin Smith quit their jobs to start the venture. Semafor.com and its mobile site will have a signature yellow background to match coverage in the US and sub-Saharan Africa. The news company will introduce regional and national coverage in the Middle East, Asia, Europe and other countries.

The Smiths, who are not related, will take lessons learned from more than 20 years in digital media to steer Semafor into what they hope will be a global, profitable business.

The recent sales of Axios (to Cox Enterprises), The Athletic (to The New York Times) and Politico (to Axel Springer) have given Semafor a path toward building and selling a company for hundreds of millions of dollars, although Justin Smith said that he has not had any talks about selling at a specific valuation with Semafor’s investors. They include Sam Bankman-Fried, founder of cryptocurrency exchange FTX, and Jessica Lessin, founder of tech news site The Information.

Still, ad-supported digital media is a sector known for recessionary droughts and low growth — with plenty of cautionary tales. BuzzFeed has seen its valuation drop by 80% since its IPO. Vice’s bid to go public failed as investors downplayed its prospects. It has been trying to find a buyer for years.

Semafor will immediately stand out from legacy news publications such as The New York Times, The Wall Street Journal or CNN.com through its unique article structure. All stories, possibly with the exception of Breaking News, will follow a “Sema form”, with five sections: “The News”, “Reporter’s View”, “Room for Disagreement”, “The View From” and “Notable”.

Each story will give reporters a chance to weigh in on news, themselves, in a specific section, while including paragraphs about why their take might be wrong. Stories will also include a section that provides a macro/global perspective, to limit local bias.

To address information overload, a key flaw in the current media ecosystem, according to Justin Smith, external media analysis will be truncated and found in the Notable section. “Semaform” stems from Justin Smith’s experience managing newsrooms at Bloomberg, The Atlantic, Quartz and The Week, along with Ben Smith’s time as managing editor at BuzzFeed News and his time at the New York Times.

It’s an evolution of Axio’s distillation of news into bullet points, the “Bloomberg Way” (a style guide that focuses on clarity) and this week’s emphasis on a wide range of viewpoints.

“We started trying to isolate individual problems, like polarization and information overload, and sort them out,” says Justin Smith. “We went out to different segments of users with meaningful conversations and asked them about some of the ideas we had developed. There was a real sense of frustration but also surprise that the core unit of journalism – the article – hasn’t really evolved in literally hundreds and hundreds year.”

The business plan

Semafor will start as a free, ad-supported media site but will evolve into a paywall for subscription sites in about 12 to 18 months as it gains brand recognition, Justin Smith said. Despite launching at a time of economic uncertainty when brands are cautious about how they spend on digital media advertising, Semafor will debut with partnerships with companies such as Verizon and Pfizer.

“We’re definitely ahead of where we expected to be on the revenue and monetization front,” said Semafor chief revenue officer Rachel Oppenheim. “We operate in a specific part of the advertising market, which is corporate reputation and brand promotion. Although brands are under pressure from a financial perspective, they are also under great pressure to promote their reputation and reach key stakeholders. A hallmark of many conversations we have had is: “I’ve never seen anything like it before. It’s been deeply humbling and encouraging.”

Semafor has raised $25 million and has shared its five-year business plan with investors, Justin Smith said. It will spend its initial investment and gauge how the business is doing before setting firm profitability targets or raising more money, he added.

Ben and Justin Smith named the company Semafor after the word “semaphore”, a visual signaling device, which sounds the same in about 35 different languages. The media company will be launched with around 60 employees, more than half of whom are reporters.

Correction: This article has been updated to reflect the correct spelling of The Wall Street Journal. An earlier version contained a typographical error.

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