The Messenger, a news website that pledged to shake up the media industry with a playbook borrowed from the doomed publishing start-ups of yesteryear, will be closing down.
In an email to staff, the site’s founder, Jimmy Finkelstein, said that The Messenger’s shutdown was “effective immediately.”
“This is truly the last thing I wanted, and I am deeply sorry,” Mr. Finkelstein wrote.
By closing less than a year after it launched, The Messenger will now be one of the biggest busts in the annals of online news. And its collapse is the most substantial blow in recent months to the news industry, which is reeling from an unrelenting series of cutbacks.
The organization hired about 300 people, including journalists with experience at such publications as Politico, Reuters, NBC News and The Associated Press, who joined the company in the hopes that it would deliver on its promise to introduce an important new nonpartisan voice to the American news landscape.
Mr. Finkelstein spoke grandly of its editorial ambitions, telling The New York Times in March that he wanted the website to recall great journalism institutions like “60 Minutes” and Vanity Fair. He critiqued the coverage on channels like CNN and Fox News, noting what he said were inconsistencies in coverage of the Jan. 6 attack on the U.S. capitol and the southern border.
Mr. Finkelstein and The Messenger’s president, Richard Beckman, a magazine veteran, planned to hire 550 journalists within a year, which would have put the website in a weight class with publications like The Los Angeles Times. Mr. Beckman predicted that The Messenger would generate $50 million this year. During a demo last year for The New York Times, Mr. Beckman said he wanted The Messenger to make readers “fall in love” with media again, illustrating the point with a sizzle reel scored by the Dire Straits hit “Money for Nothing.”
Mr. Finkelstein, an entrepreneur with decades of experience running publications like The Hollywood Reporter and The Hill, attracted $50 million in investments for the untested start-up. The Messenger’s backers include Josh Harris, a co-founder of the private-equity giant Apollo, and Thomas Peterffy, the former chief executive of Interactive Brokers. Mr. Harris was a backer of The Hill, which Mr. Finkelstein sold to Nexstar in 2020 for $130 million.
But their money was quickly spent. Near the end of last year, the company had generated only $3 million and had just $1.8 million in cash on hand. The Messenger lost about $38 million — the majority of its initial $50 million funding round — and was spending more than $8 million on offices in Florida, Washington, D.C., and New York.
Things quickly went sour after the launch. A well-regarded politics editor, Gregg Birnbaum, quit after clashing with The Messenger’s chief growth officer, Neetzan Zimmerman. Employees grew fatigued with demands to mass-produce stories based on competitors’ articles. The site’s debut was met with a tepid reception from industry critics like Columbia Journalism Review and Nieman Lab.
Things got worse in recent weeks. Mr. Beckman announced his departure, citing health issues on a social-media post. The company began running out of money. It cut staff, attempting to husband cash. And Mr. Finkelstein made a last-ditch effort to raise money to keep the company afloat.
But even as the company hemorrhaged cash, Mr. Finkelstein remained outwardly optimistic. In early January, he said he had already raised $10 million and was planning to roll out an ambitious suite of products including Messenger TV, a video unit. The site had also begun to gain traction with readers. The Messenger told potential investors that it attracted 24 million visitors in December, a 24 percent increase from the previous month.
“Over the past few weeks, literally until earlier today, we exhausted every option available and have endeavored to raise sufficient capital to reach profitability,” Mr. Finkelstein wrote in his note to the staff on Wednesday. “Unfortunately, we have been unable to do so.”
Instead, the company has joined the many news organizations that have announced layoffs and buyouts in the last two weeks. The cuts have affected storied magazines like Time and Sports Illustrated, digital publishers like Business Insider and traditional newspapers like The Los Angeles Times.
Many of The Messenger’s employees had feared an announcement about a shutdown was looming. On Wednesday, before Mr. Finkelstein’s note, many of them filled the company’s instant messaging forum with posts about the possibility. As the day wore on, staffers began posting pictures of their pets to lighten the mood.
A confluence of problems is behind the carnage, including slumping advertising revenue, disappointing digital subscribership, corporate infighting and deep budget cuts.
The Messenger’s fatal flaw was over-relying on tech companies like Google and Meta for its readership instead of engaging directly with its audience through newsletters and in-person events, said S. Mitra Kalita, founder of Epicenter-NYC and URL Media.
“The Messenger was built off expertise of an internet that no longer exists,” Ms. Kalita said. “Facebook was not going to surface its links no matter how clickable those headlines were.”