Axel Springer buys 88 percent stake in Business Insider

Axel Springer has acquired 88 percent of Business Insider at a cost of $343 million. This means the German media conglomerate, which previously owned 9 percent of the publication co-founded by Henry Blodget, Kevin Ryan, and Dwight Merriman in 2007, now owns 97 percent of the primarily business-and tech-focused news site.
According to Axel Springer’s announcement, the rest of the company (all 3 percent) will be owned by Amazon chief executive Jeff Bezos’ personal investment vehicle, Bezos Expeditions. Business Insider’s leaders — chief executive Henry Blodget and chief operating officer and president Julie Hansen — will remain in their positions.
The price paid for Business Insider is less than the $560 million reported by Recode last week, but it’s still the most expensive acquisition of a Web-based publication since AOL spent $315 million on the Huffington Post in 2011. So what will Axel Springer get for the hundreds of millions it will spend on the growing news site?
Here’s what the German media company had to say about that in its announcement:

This acquisition is a vital part of Axel Springer’s strategy to broaden its global reach, diversify its English-language offerings and expand its commitment to innovative digital journalism.
The addition of Business Insider’s 76 million unique monthly visitors will increase Axel Springer’s worldwide digital audience by two-thirds to approximately 200 million users, making the company one of the world’s six largest digital publishers in terms of reach.

Recode says Axel Springer might also have been motivated by its failure to acquire the Financial Times earlier this year. The company’s also said to have wanted a Web asset, and Business Insider was “more affordable than publishers like BuzzFeed and Vox Media” despite the record-setting price it fetched as a Web-only news outlet.
Both of those companies have had their suitors, though. Reports surfaced last year that Disney had engaged in acquisition talks with BuzzFeed, and rumors about Vox Media selling to Comcast (one of its investors) have popped up throughout the year. Perhaps Business Insider’s sale will prompt some of these other talks to resume.

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Tech and media firms join Twitter in key test of FBI gag orders

A bitter fight between the Justice Department and Silicon Valley is expanding as a diverse group of companies have lined up behind Twitter in a case that will help determine the limits of free speech in the age of Edward Snowden.

On Tuesday, groups ranging from BuzzFeed to Wikipedia to the Guardian filed friend-of-the-court briefs (see below) to support a challenge by Twitter to Patriot Act gag orders. Two other large companies, which are only allowed to refer to themselves as “Corporations 1 & 2,” also filed briefs.

The case, which began when Twitter sued the Justice Department in October, turns on how companies may use so-called “transparency reports” to tell users about government requests for their data.

Twitter claims it has a right under the First Amendment to say specifically how often it receives National Security Letters, while the government counters that companies can only do so in broad strokes lest they jeopardize national security.

In recent years, the FBI has made extensive use of National Security Letters to obtain information about subscribers, while also attaching gag orders to the letters that forbid companies from revealing they have even received a letter in the first place. The Justice Department has issued hundreds or thousands of such letters to companies like Google, Facebook and AT&T.

In its lawsuit, Twitter claims it is an illegal prior restraint of free speech for the government to bar companies from even disclosing that they have received a letter. A group of media companies has now voiced support for that argument:

“Twitter’s proposed transparency report is no less entitled to free speech protections than ‘literature’ or ‘movies,'” said the brief filed on behalf of BuzzFeed, NPR, the Washington Post, PEN America, the Guardian and First Look Media.

The brief reflects the media’s newfound legal interest into what has largely been a tech industry fight, but also shows how digital media companies like BuzzFeed are finally taking up the legal fight for free speech, a burden that has long been borne almost entirely by old-line newspaper companies.

“Corporations 1 & 2”

Meanwhile, a separate filing shows that a phone and internet company are also weighing in on the Twitter case, but in the guise of “Corporations 1 & 2.” The companies (which are likely Verizon and Google or Yahoo) are using the pseudonyms at the direction of a judge, and are muzzled in part because they are already before an appeals court in another national security case over the right to disclose government demands.

The right of internet companies to discuss security letters has become more pressing since 2013 , when leaked documents from Edward Snowden revealed massive surveillance operations by the U.S. government. Those operations rely on obtaining information from tech and phone companies, and have been facilitated by the legal process governing Patriot Act letters, as well as a related process for NSA demands.

In response, companies like Twitter have come to claim that free speech and the public interest give them the freedom to disclose how many NSA and FBI letters they receive in the first place. The companies stress they are not arguing for the right to disclose the contents of the letters, since doing so could jeopardize ongoing investigations, but only the existence of the letters.

The docket also shows that a group of other entities  — the Wikimedia Foundation, CloudFlare, Sonic, Wickr, Credo Mobile and Automattic (publisher of WordPress.com) — filed a brief in support of Twitter.

Here’s a copy of the media companies’ filing with some of the key parts underlined. Note that a key part of the argument turns on whether the federal judge has authority to hear the case in the first place (as the companies argue) or if the case belongs instead in a controversial secret court (as the Justice Department claims).

Media Amicus in Twitter Case

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This article was updated at 12:35pm ET to note that Automatic is the publisher of WordPress.com; an earlier version said “WordPress” (which refers to the software used by the company, WordPress.com). This article was also updated at 1:40pm on Thursday to clarify that it was the Wikimedia Foundation (not Wikipedia) that was on the amicus brief.

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