G / O Media, the owner of websites that once belonged to the blog empire Gawker Media, has acquired the business news site Quartz, the latest deal in a wave of consolidation among digital publishers.
Zach Seward, a co-founder and chief executive of Quartz, will stay on at the company as Quartz’s editor in chief and general manager, said Jim Spanfeller, chief executive of G / O Media.
The companies declined to disclose the deal price.
Mr. Spanfeller said Quartz was an attractive acquisition because of its high-quality global business journalism, which has the potential to lure subscribers and valuable advertisers like the consulting firm Accenture to G / O Media.
The company is focused on buying websites that broaden G / O’s editorial focus and expand into new categories, Mr. Spanfeller said, “and at the top of that list is business journalism.”
Mr. Seward said in an interview this week that he had discussed the deal with G / O Media in virtual meetings since January. He said he thought it made sense for Quartz to be part of a network of sites like G / O Media’s, which includes Deadspin, Gizmodo and Jezebel.
“That should be able to help scale up our existing lines of business as well as add some new ones that they have expertise in,” he said.
Mr. Seward said in a memo prepared for Quartz’s staff that employees would be eligible for bonuses drawn from the sale proceeds, which total more than $ 1 million. Quartz has 50 journalists in its newsroom, and Mr. Spanfeller said no layoffs would result from the deal.
Digital media companies have come under significant pressure to merge in recent years as an ever-larger share of digital advertising goes to tech giants like Google’s owner, Alphabet; Facebook’s parent, Meta; and Amazon. Several companies have teamed up to pool their audiences and diversify their businesses: Vox Media and Group Nine Media; BuzzFeed and Complex Networks; and Vice Media and Refinery29. Investors have cooled on digital publishing companies, pressuring them to show profits after years of focusing on increasing revenue and audiences.
Quartz has been no exception. The site lost about $ 6.9 million in 2021, according to people with knowledge of its finances. Before the deal with G / O Media, it was not expected to break even until 2023. The site generated about $ 11.1 million in revenue in 2021, down from about $ 12.3 million in 2020, as advertising sales suffered, some of the people said.
Last fall, Quartz considered turning to investors to weather the storm. One investment pitch reviewed by New York Times reporters said the company was seeking to raise between $ 2 million and $ 3 million at a valuation of $ 20 million.
Mr. Seward committed $ 100,000 of his own money to the round, according to the pitch, and was planning to ask readers to invest by buying cryptocurrency tokens. Quartz also sought recognition as a so-called B Corp, or benefit corporation, a distinction granted to socially conscious companies.
This year, Quartz hired Grimes, McGovern & Associates, an advisory firm, to pitch media companies on an outright acquisition of the property, the people said.
Mr. Spanfeller said plans call for Quartz to be profitable by the end of the year. Quartz should receive additional readers from referral links embedded on other websites owned by the company, which would increase the site’s advertising revenue.
Quartz was co-founded by Mr. Seward in 2012 as a business news site with about 20 journalists under the auspices of Atlantic Media, the publisher of the magazine The Atlantic. The site was sold in 2018 to Uzabase, a Japanese firm, in a deal that amounted to about $ 86 million. But the pandemic shrank advertising revenue, and Uzabase cut nearly half of Quartz’s staff. After two years of ownership, it put the publication up for sale.
Mr. Seward bought Quartz in November 2020 and took it private. The website has expanded its paying subscriber base to around 25,000, from fewer than 18,000 in April 2020.
It’s unclear how Quartz will mesh with G / O Media, whose history has been punctuated by tumult.
G / O Media was formed in 2019 after the private equity firm Great Hill Partners bought the constellation of websites that used to be part of Gawker Media. Employees have at times rebelled against management, with the entire editorial team of Deadspin resigning in 2019 amid a conflict over a directive to “stick to sports” reporting. This year, employees of G / O Media went on strike for several days, demanding higher salary minimums.
Quartz announced this month that it would remove its paywall, and the site will remain free under G / O Media. Mr. Spanfeller said Quartz would also continue to offer paid products, including access to content from Quartz Japan and Quartz Africa.
Mr. Seward said Katherine Bell, the site’s current editor in chief and his business partner, would step down from her role but remain as an adviser to the company.
Mr. Spanfeller declined to provide detailed financials for G / O Media but said the company was profitable last year and increased its advertising revenue 53 percent from the year before.