IBT

The mysterious company that just bought Newsweek

August 7, 2013: 10:33 AM ET

IBT wants to challenge established media players.  But is  "California Woman Cuts off Husband's Penis, Says He Deserved it" going to ... er ... cut it?

130806154941-newsweek-620xa

FORTUNE -- "We acquired Newsweek!!!"

So tweeted Etienne Uzac, CEO of IBT Media, over the weekend. He was certainly upstaged Monday afternoon when Jeff Bezos announced he was buying the Washington Post. Still, Newsweek is a big name, especially to be acquired by a company you've probably never heard of. And yet despite his new media property's high profile, Uzac's tweet was a dud, retweeted exactly once, loyally, by the managing editor of IBT's flagship website, IBTimes.com.

Uzac and his co-founder, Johnathan Davis, aspire to leadership of the digital media revolution. Their flagship website -- International Business Times, at IBTimes.com -- is among the top 0.02% of the 1,000,000 URLs monitored by Quantcast; it claims an online audience of over 7 million in the U.S. and 13 million worldwide. But when I added Uzac to my Twitter list Monday morning, I became only his 51st follower.

Who are these guys who hope to salvage one of the most storied institutions in American journalism, and so succeed where the Post (which owned Newsweek for years), Tina Brown, and Barry Diller failed?

Uzac, the CEO, turns 30 on August 7, on the one-year anniversary of his Wikipedia listing. He grew up in France and South Africa, carries a French passport, and studied geography and economics at the London School of Economics, where he became entranced with the new globalism. "We talked a lot about how the U.S. and Europe were still rising but not as fast as the BRICS," Uzac tells Fortune. "I saw an opportunity to serve these non-Western countries with great information."

MORE: Why America's youth aren't finding jobs

His partner and IBT's chief content officer is Johnathan Davis, a 31-year-old American who studied computer engineering as an undergraduate at UCLA and did time in Silicon Valley. (Davis is more popular: He has 77 followers, but he quit tweeting a year ago.) Together they launched what became IBT Media in 2006, with personal savings, a SBA bank loan, and no input, financial or advisory, from VCs. They say they've been profitable since 2010. Headquarters are in New York, with offices in Bangalore, Shanghai, and Sydney. Total editorial employees: about 150.

Some reports have tied Uzac and Davis, personally and financially, to David Jang, founder of San Francisco-based Olivet University. Jang is a controversial figure. He may or may not believe that he's the second coming of Christ, according to an investigation by the evangelical magazine Christianity Today, but apparently many of his followers are convinced that he is.

Uzac and Davis take pains to distance themselves from Jang. They deny that anyone other than themselves has ever held equity in IBT Media. Both acknowledge through their spokesperson at Edelman that they have ties to Olivet University but that they've always been "informal and unpaid ... IBT Media's editorial is 100% independent and adheres to the highest quality of conduct."

In a recent interview with his own IBTimes.com, Uzac said he "hopes the site will become a global answer to the 'established business media' in New York and London."  That would be business broadly defined, with an eye for sparkly headlines that generate traffic. There is original reporting, like Tuesday morning's lead story on CVS's "seriously good second quarter." And a lot of HuffPost-style pick-ups from other news organizations, including some where the business angle is not obvious. This July 12, 2011 dispatch, for instance, courtesy of Reuters: "California Woman Cuts off Husband's Penis, Says He Deserved it." Davis liked that story so much he tweeted it.

Among many recent IBT creations are video-heavy sites devoted to cars, sports, science, design, and entertainment. At all-video bizu.tv, launched last year, you'll find an interview with an IBTimes reporter talking about how people bank in war zones, side by side with "How To Deal With A Hangover At Work" and "Jennifer Anniston's Diet Secret." Uzac explains: "Building an audience is the meat and potatoes. In the beginning we had to do that to keep the lights on, but the culture remains."

MORE: What Jeff Bezos learned from Warren Buffett

You'll also find yourself searching for the mute button on your keyboard. IBTimes makes you listen to those annoying auto-play videos; Uzac is unapologetic. Traditional web banner advertising is "losing its luster," he told IBTimes.com. "We now generate 30% of our revenue through video advertising, versus 5% a year ago."

Newsweek is IBT's first acquisition and brings the company, through Newsweek's paid subscription site, its first source of revenue other than advertising. Uzac says he'll tap that stream to nourish IBT Media, but not, he insists, at the cost of bleeding Newsweek dry.

Two days after his celebratory tweet, Uzac posted this more somber follow-up:  "Feeling very responsible right now to grow the @Newsweek brand to new heights." We wish him luck.

Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.