The digital media start-up had come under scrutiny for its business practices after articles in The Times.
United States | Ozy Media, the digital media company that came under intense scrutiny for its business practices in recent days, announced on Friday that it was shutting down, following a sudden flight of investors and advertisers and bringing to a close a strange chapter in the annals of online journalism.
It was a precipitous fall for a company that was once a darling of Silicon Valley investors who believed in the vision of its leader, the former MSNBC anchor Carlos Watson. Mr. Watson had aimed to create a sparkling multiplatform media company that would appeal to a diverse generation of younger readers looking for the kind of content not provided by establishment news organizations.
When the end came, it came swiftly, five days after The New York Times published an article that raised questions about the company and its leadership team. The report detailed an episode in which a top executive at Ozy appeared to have impersonated a YouTube executive during a conference call with Goldman Sachs bankers in February while the company was trying to raise $40 million.
In a statement on Friday, the company’s board of directors praised the “dedicated staff” of “world-class journalists,” adding, “It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy’s doors.”
The abrupt collapse riveted media observers not because Ozy had a large number of loyal readers — that, in the end, was the problem — but because many had wondered how the company had managed to survive. The answer had to do with a charismatic and relentless founder, a great story and a slick brand that was perfectly tuned to appeal to noted Silicon Valley investors and powerful advertising executives.
Its founder, Mr. Watson, was an investment banker who dreamed of having his own talk show. When that eluded him, after a brief stint in 2009 as a host on MSNBC, he built a media company in his own image as a politically moderate, upwardly mobile son of teachers, one who had gotten degrees at Harvard and Stanford and worked at Goldman Sachs.
Mr. Watson and his partner, another Goldman alumnus, Samir Rao, raised more than $80 million from some of the biggest names in finance. The company debuted in 2013, backed by investors including Emerson Collective, the organization run by the billionaire philanthropist and media entrepreneur Laurene Powell Jobs, and Marc Lasry, a hedge fund manager and a co-owner of the Milwaukee Bucks basketball franchise.
Ozy, whose motto was “the new and the next,” had its headquarters in Mountain View, Calif., not far from the start-ups that had built themselves into multibillion-dollar giants. It employed roughly 75 people to create articles, videos, podcasts and newsletters on a range of topics, from espionage to the appeal of Grandma’s kitchen. Many of the videos and television shows that Ozy also sold starred Mr. Watson in conversation with politicians and pop culture celebrities, a group that included Joseph R. Biden Jr., Hillary Clinton and John Legend.
Ozy’s appearance of success depended to some degree on the performance of its videos on YouTube. On the conference call in February, the person posing as a YouTube executive told the Goldman Sachs team that Ozy was a great success on the platform.
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