At 5:57 Pacific Standard Time yesterday evening, the managers of Gigaom posted one last news story: it was shutting down.
Gigaom, the business and technology news site that was widely regarded as one of the world’s most crucial sources of industry news, shocked that very industry by shutting down last evening, laying off all of its employees, and offering nothing more than a cryptic item on its Web site: “Gigaom recently became unable to pay its creditors in full at this time. As a result, the company is working with its creditors that have rights to all of the company’s assets as their collateral. All operations have ceased.”
Phone calls to the company’s West Coast office were met with this equally mysterious notice: “Hello. We are not available now. Please call again. Thank you for your call.”
Just like that, one of Silicon Valley’s must-reads collapsed without a word of warning. According to Mathew Ingram, a senior writer at Gigaom and one of the site’s most respected reporters, the staff had no idea that the company was bleeding money so fast. “We all knew we were losing money,” Ingram said. “But we’ve been losing money for eight years. I don’t think anyone expected this.”
— Mathew Ingram (@mathewi) March 10, 2015
In 2006, technology reporter Om Malik founded Gigaom as a Silicon Valley-centered news aggregation site and soon built it into one of the industry’s most-read Web sites, employing roughly 22 editors and writers and attracting 6.4 million viewers a month. The company relied on three revenue streams to recoup its creditors’ investment: research, news reporting, and hosting expensive technology conferences. According to Ingram, reporting was the least lucrative of these ventures, but at least it drew eyeballs to the site.
“It was a great way to get people to see us and build new customers and get people to go to our conferences,” Ingram said.
But as time went on, Ingram added, other news media outlets began to see the value in hosting conferences. And as outlets such as the Atlantic and the New York Times began organizing high-minded TED Talks, the entrance prices for such conferences began to decline.
“Everyone decided that conferences was a great way to make money. But now everyone has piled onto the market,” Ingram said. “Over time, that decreases your market share.”
As advertising revenue has been wiped out by the rise of Craigslist, Amazon, and Google, media companies have been struggling to find new ways to make money. Om Malik found a way early on by organizing conferences and drawing smart people together for a price. Now the secret is out, and every other outlet is in the game. If gatherings of experts and charging money to hear them talk can’t pay the bills, what can?
Ingram had a feeling something was wrong with Gigaom a few weeks ago. Still, he said, when the hammer came down last night, the mood among the staff was one of surprise and dismay.
“One minute you’re working on a story, and the next minute someone is telling you you don’t have a job, and they’re turning the lights out.”