David Lerman

So who's making money publishing on the web?

May 10, 2013: 11:50 AM ET

New media companies -- from Gawker to Buzzfeed -- have sprung up to feed every niche (and then some). Which are actually profitable?

FORTUNE -- The web has given rise to a number of notable digital publishers serving almost everyone's tastes, from straightforward news to guilty pleasures. For every Pulitzer-winning 10-part series on wounded war veterans, there are just as many frothy posts like the "10 funniest cat GIFs of the week." What about earnings? Some like The Awl have been profitable from the outset; others like Vox Media predict they'll be in the black soon. Here's a snapshot of just several new media businesses and how they're doing.

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Huffington Post co-founder Arianna Huffington. Credit: Twitter.

The Huffington Post
New York

Founded:  2005
Readers:  73.1 million worldwide
Employees:  Not available. (Estimated: Up to 500.)
Who runs it:  Greek author, columnist, and influencer Arianna Huffington
What it's known for:  What isn't it known for? In eight years, HuffPost has become one of the most popular news websites in the U.S., with a wide array of content, from hard news and celebrity commentary to aggregated stories from outside outlets and award-winning reportage. In 2012, it was awarded a Pulitzer in National Reporting for a 10-part series on war vets by senior military correspondent David Wood called "Beyond the Battlefield."
Backstory:  Launched by Huffington, businessman Kenneth Lerer, deceased commentator Andrew Breitbart, and Jonah Peretti, creator of Buzzfeed, as a hub for news, commentary, and select third-party articles. Think Drudge Report, but more mainstream.
Backers:  $1 million in initial funding with an additional reported $20 million later, followed by the $315 million acquisition by AOL in 2011.
Business model:  Largely composed of digital advertising but also content syndication and e-commerce.
Revenues:  Not available, but the outlet once aimed to triple sales from $30 million in 2010 to $100 million last year.
Profitable:  Briefly in 2010, but not since its acquisition.
What's next:  Aggressive international expansion and more video across the entire site, according to a HuffPost spokesperson.

Gawker Media
New York

Founded:  2002
Employees:  150
Readers:  40 million worldwide
Who runs it:  Founder and CEO Nick Denton.
What it's known for:  "Today's gossip is tomorrow's news," is the mission statement the Gawker website likes to go by, and indeed the site made a name for itself with snappy -- and sometimes laugh-out-loud snarky -- blog posts riffing or reporting on the latest events. As The New Yorker once put it, Gawker relied on "elegantly jaded bloggers who considered themselves outsiders with nothing to lose." Since then, it's expanded with properties like the popular women's blog Jezebel and the gadget-oriented Gizmodo and remains one of the best examples of successful web publishing.
Backstory:  Denton started Gawker in his SoHo apartment, where he ran it for years. The outfit now operates largely from Manhattan's Nolita neighbhorhood.
Backers:  Self-funded during the company's early years.
Business model:  Led by brand advertising programs, but the publisher is also currently developing e-commerce, licensing, and international revenue stream opportunities.
Revenues:  Not available, though Denton has said he is looking to grow revenue 40% this year and thinks sales will top $100 million "someday."
Profitable:  Yes, according to third-party reports, possibly as early as 2006.
What's next: The launch of a new publishing and discussion platform called Kinja. According to a Gawker spokesperson, Kinja should make authoring content easier for anyone (editor, reader, or marketer) and for discussion to reach "new levels of truth and quality."

The Awl co-founder Choire Sicha. Credit: Jonathan Snyder.

The Awl co-founder Choire Sicha: "It was a terrible recession for people in our field ... We finally just decided to stop working for those people who didn't care about us." Credit: Jonathan Snyder.

The Awl
New York

Founded:  2009
Employees:  15
Readers:  3 million monthly visitors as of this past January. ("We only want smart people to read us," co-founder Choire Sicha jokes.)
Who runs it:  Ex-Gawker writers Sicha and Alex Balk.
What it's known for:  Smart, snappy blog posts recapping the day's happenings in news, politics, and entertainment. The tone borders on snarky but never crass.
Backstory:  "It was a rather terrible recession for people in our field," recalls Sicha. Though they'd worked at Gawker, magazines, and newspapers, Sicha and Balk found themselves unemployed. "We finally just decided to stop working for those people who didn't care about us."
Backers:  Self-funded by Balk and Sicha.
Business model:  Advertising.
Revenues:  Not available.
Profitable:  Yes.
What's next:  A brand-new site joining recent additions like the female-focused The Hairpin. Says Sicha: "We have the talent and the name, and we're looking for a really smart brand." In other words, stay tuned.

Vox Media
Washington D.C. and New York

Founded:  2003
Employees:  200, with 700 freelance writers
Readers:  50 million worldwide
Who runs it
:  Jim Bankoff. The ex-AOL exec's biggest claims to fame include AOL's acquisition of the tech blog Engadget and the creation of the hit Hollywood blog TMZ.
What it's known for:  Vox operates the sports blog SB Nation, the rapidly growing tech site The Verge, and the recently-launched videogame-focused Polygon. In an age where some sites lean on gimmicky content and endless slideshows to bolster traffic, Bankoff says Vox bucks that trend with quality online journalism and cutting-edge web design.
Backstory:  Vox was originally founded by political activist Jerome Armstrong, freelance writer Tyler Bleszinski, and Daily Kos creator Markos Moulitsas as a sports site.
Backers: Accel Partners, Comcast Ventures, and Khosla Ventures, among others, have reportedly chipped in $40 million or so total.
Business model:  Primarily display advertising.
Revenues:  Not available.
Profitable:  By the end of the year.
What's next:  Vox Creative, a digital ad division aimed at helping marketers create attractive and effective online ads. "Who really likes web advertising now? No one, because it sucks," Bankoff half-jokes. "Advertisers want to shift to digital, but in some cases, the content is not worthy of their brand, and in some cases it's just not performing for them." The pairing of high-quality online content and now, a digital ad agency, makes Vox unique, he says.

HuffPost co-founder and Buzzfeed CEO Jonah Peretti.

HuffPost co-founder and Buzzfeed CEO Jonah Peretti.

Buzzfeed
New York and Los Angeles

Founded:  2006
Employees:  Not available
Readers:  40 million-plus, as of March 2013
Who runs it:  HuffPost co-founder Jonah Peretti as CEO, Politico alum Ben Smith as Editor-in-Chief.
What it's known for:  Lists that go viral like 40 Things that Will Make You Feel Old.
Backstory:  Peretti built BuzzFeed with the mantra that smart people will carry his property, not unpaid bloggers or unknown Internet users, matching companies like LinkedIn. "'Now these platforms are all saying, 'How can we get good content that goes beyond user-generated content?'" he told Fortune last fall.
Backers:  SV Angel's Ron Conway, Lerer Ventures, Buddy Media co-founder Michael Lazerow, Softbank Capital, and others contributed $46 million.
Business model:  Native advertising, or ads that blend in with the other stories on the site.
Revenues:  Not available, although Peretti has said revenues quadrupled through most of 2012. The Wall Street Journal suggested Buzzfeed could generate $40 million in sales this year.
Profitable:  Not available.
What's next:  More original videos thanks to web video pioneer Ze Frank.

Business Insider
New York

Founded:  2007
Employees:  Not available
Readers:  24 million-plus*
Who runs it:  Ex-Wall Street stock analyst Henry Blodget.
What it's known for:  Swift business news analysis and recaps of third-party news items, but also sensational headlines and extensive slide shows.
Backstory:  Ex-Gilt Groupe CEO Kevin P. Ryan and Blodget first drummed up the idea of a tech site, which became Silicon Valley Insider. The site has since expanded into what Business Insider is today. "I wasn't thinking, 'Here's [my] next act,' Blodget recently told USA Today. "I was thinking, 'Here's a real opportunity to do what I've been doing.'"
Backers:  Amazon (AMZN) CEO Jeff Bezos, Andreessen Horowitz's partner Marc Andreessen, and RRE Ventures, to name a few.
Business model:  Advertising and more recently, conferences.
Revenues:  Roughly $12 million in 2012, according to a New Yorker profile on Blodget.
Profitable:  A small, undisclosed profit during the first quarter of this year.
What's next:  Acquisition -- at least eventually. Blodget allegedly expects the site to "become part of a larger enterprise or become the larger enterprise."

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SAY Media co-founder and CEO Matt Sanchez: "You're going to see us now get really focused on what we've been building more so than vast expansion." Credit: SAY Media.

SAY Media
San Francisco and New York

Founded:  2005
Employees:  400
Readers:  20 million
Who runs it:  Co-founder Matt Sanchez.
What it's known for:  An umbrella of style, tech, and lifestyle websites including the tech site ReadWrite, acquired in 2011, SplatF, a tech blog penned by former Business Insider founding member Dan Frommer, and the female-focused xoJane, from Sassy Magazine founder Jane Pratt.
Backstory: SAY is the result of VideoEgg, a video publishing and sharing network, co-founded by Yale alums David Lerman, Kevin Sladek, and Sanchez. "We were selling a lot of advertising on lots of fun sites, and we'd done a lot with the ad experience but couldn't control the rest of the page," explains Sanchez, who felt somewhat shut out from the burgeoning "personal publishing" movement and saw an opportunity to evolve the online reading experience just as much as VideoEgg had done with advertising. So in 2010, VideoEgg acquired the software company Six Apart and rebranded itself to SAY Media. The focus became its ad network and online editorial content with what Sanchez emphasizes has a "point of view."
Backers:  NEA, Maveron, and First Round Capital and others have reportedly invested over $60 million since 2005.
Business model:  Ad-based, although SAY is beginning to dabble in commerce also, with the goal of enabling readers to more directly purchase items they read about on various sites.
Revenues:  Not available.
Profitable:  No, later this year.
What's next:  Besides the recent acquisition of the teenage online mag Rookie? "Building out the brands we have," says Sanchez. "The last two years have been transforming from ad network to media company. I think you're going to see us now really get focused on what we've been building more so than vast expansion of our front line." Layoffs too. Today the company said it was laying off 10% of its staff as it transitions from an ad network to a more editorially driven site.

*Source: Google Analytics

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