Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

(Updated )

Let the events of the past week serve as the 4,271st iteration of the same lesson: Digital media is hard. 

Every six months or so, companies that seemed to have cracked the formula for success in digital information and entertainment hit a wall. Names like Demand Media, Gawker, Mashable, Upworthy and BuzzFeed figure out how to get people to click, surf and share -- and expectations go up. Then because of changes in tastes, technology and advertiser habits, it becomes more difficult to get people to click, surf and share. Business models that had traction for a while stop working as well or can't live up to high hopes. 

Digital media in the Facebook and iPhone era has become like baseball in the "Moneyball" age. Clever statistics-driven strategies for assembling players and positioning them on the field stop working once everyone catches on. Franchises have to keep coming up with fresh ways to stay ahead -- or end up as hapless losers.

Hard to Stay on Top
Young companies have climbed the ranks of most popular news and information websites in the country. But they have to keep reinventing their strategies to stay ahead of changing tastes of consumers, advertisers and powerful gatekeepers like Facebook.
Source: ComScore

In a sign of the times, look to the shifting fortunes of one of the early winners in online news and information. Demand Media paid a pittance to crank out thousands of articles daily about how to paddle a kayak or make a sourdough bread starter and then cooked up ways to ensure its articles and Web videos ranked high in Google searches.

People and Web-search ad money flowed freely. The company in its 2011 IPO documents boasted about being the 17th-largest Web property in the U.S., with more than 105 million visitors each month. The traditional media world panicked about the popularity of Demand Media.

Then the formula stopped working. Google started to penalize low-quality "content mills" like Demand Media. Eyeballs and marketing money migrated elsewhere. The company, worth more than $2 billion at its peak soon after the IPO, has lost 95 percent of its value.

The company on Tuesday continued to clean out its stable of assets to raise cash; it sold humor website Cracked for $39 million. Demand Media recently said its flagship website,, had fewer than 24 million unique visitors in January. 

Digital King Turns Serf
Shares of Demand Media have lost 95 percent of their value since they peaked five years ago
Source: Bloomberg

Sure, the reign of Demand Media was long ago, but the pattern repeats. Remember Upworthy? Or Circa? In 2014 -- not very long ago! -- those upstarts likewise seemed to have hit on winning formulas for getting people to pay attention to what they posted. Upworthy's headlines -- "This Is The Most Inspiring Yet Depressing Yet Hilarious Yet Horrifying Yet Heartwarming Grad Speech"-- were catnip to Facebookusers. Then Facebook changed its computer models, and Upworthy faded away. Upworthy got Demand Media'd. Or Demand Media got Upworthied. 

And then this week came a raft of reports about BuzzFeed, which may (or may not) have fallen short of its own targets for revenue. One of BuzzFeed's revolutionary ideas was to create ads that were just like its irresistible listicles and spread online just like those irresistible listicles.

Private investors valued BuzzFeed at $1.5 billion, or nearly as much as the parent company of the New York Times. But now other companies have caught onto BuzzFeed's "native ads" tactic, too, and that may have made people and marketers less excited -- read, less likely to pay big prices for those ads. 

Now BuzzFeed is among the news and entertainment companies changing tactics to double down on TV or Web video, both pre-recorded and live, which seem to be all the rage for the moment among advertisers. Mashable's CEO last week essentially said news is out and making Web videos about "digital culture" is in. We'll see how long the appetite for video and video advertising will last. 

News and entertainment companies have been waging wars for attention and money forever, but never have the battlegrounds, combatants and tactics shifted so often. 

It doesn't mean BuzzFeed will wind up on the same desert island as Demand Media. But it does mean that to keep ahead of competition, people's fickle tastes and the whims of powerful gatekeepers like Facebook and Google, digital media companies have to continuously reinvent their moneymaking strategies if they have any hopes of lasting as long as their old media predecessors.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Updates chart on monthly unique visitors with more recent data.)

To contact the author of this story:
Shira Ovide in New York at

To contact the editor responsible for this story:
Daniel Niemi at