Ozy to close after advertisers leak struggling media startup
Struggling media start-up Ozy Media Inc. will shut down following an exodus of advertisers, claims it has inflated its online traffic numbers and a scandal involving its co-founder posing as a YouTube frame.
“At Ozy, we are fortunate to have a remarkable team of dedicated staff,” the board said in a statement Friday. “Many of them are world-class journalists and experienced professionals to whom we owe immense gratitude, and who are wonderful colleagues. It is therefore with a heavy heart that we must announce today that we are closing the doors of Ozy.
Ozy, who touted himself as a “modern media company,” has been in turmoil since The New York Times reported this week, co-founder Samir Rao posed as a YouTube executive during a conference call with potential investors.
The fallout was quick. Before the announcement of its closure, chief executive Carlos Watson resigned from NPR’s board of directors. On Thursday, Marc Lasry, director of investment firm Avenue Capital Group and co-owner of the Milwaukee Bucks, resigned as a director of Ozy.
Ozy also suspended Rao, who was COO, and hired law firm Paul, Weiss, Rifkind, Wharton & Garrison to review its business operations. One of Ozy’s early investors, SV Angel, led by venture capitalist Ron Conway, told the company it no longer wanted the shares it had acquired, according to Axios.
Previously, Ally Financial Inc. had become the last advertiser to cut ties with Ozy. “In light of recent developments, we have decided to suspend our advertising with Ozy Media,” a spokesperson for Ally said on Friday.
Many other large companies had already abandoned the startup. Ford Motor Co., Airbnb, Goldman Sachs and Target Corp. all stopped their campaigns with the media company, the Wall Street Journal reported Thusday.
Ally and Ozy collaborated last year on a series of stories about how black leaders “take care of their mind, body and soul – in addition to their bottom line.”
The besieged startup has also faced multiple legal challenges for its alleged failure to pay its bills, including a claim from a company it hired to grow its online audience. In 2017, BuzzFeed News reported that Ozy and other websites had bought internet traffic that was not seen by real people. A recent New York Times article also raised doubts about Ozy’s claims about his online readership.