It has received $12 million in funding through two rounds, according to Crunchbase. Its first round included investment from Reddit co-founder and Executive Chairman Alexis Ohanian and Facebook co-founder Chris Hughes.
Alan D. Mutter, a UC Berkeley media economics instructor and media consultant, said the companies have similar goals, so cooperation might be better than competition.
Upworthy’s viral content suffered a blow in December 2013 when Facebook reportedly made substantial changes to its algorithm that determines what kind of updates users would see in their news feeds. That same month, Upworthy’s traffic dropped 25 percent to 67 million people, and even further in January 2014 to 48 million.
Lindenauer said any problems with Facebook have since been resolved.
“Facebook consistently changes their algorithm and we adjust. Upworthy saw early success from ‘curiosity gap’ headlines – a concept that was new to the market,” she said in an email. “These are headlines that pique curiosity, but our goal was to make sure the story delivered. Many other publishers copied the format with stories that didn’t deliver, and click bait was born. Facebook depressed that content which impacted many publishers, but Upworthy pivoted away from those headlines and towards original content.”
“Our Facebook reach is bigger than ever,” Lindenauer said.
Goldhirsh, who started Good in 2006, bankrolled the company himself, funding the venture from money received with the death in quick succession of his parents while he was in college. His father, Bernard, had started a pair of business periodicals, including Inc. Magazine, which he sold for a reported $200 million.
“These are two well-intentioned niche companies that hope to achieve greater scale – therefore, they hope, achieving greater profitability – by combining resources, eliminating duplicative functions and consolidating their respective market presences in a single entity,” Berkeley’s Mutter said in an email. “In other words, they have decided it is better to partner up than to compete with one another for the same market opportunity.”
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