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article imageTabloid web startup Ratter lays off staff but wants to stay alive

By Nathan Salant     May 21, 2015 in Internet
San Francisco - Q: What do naked car chases, overcast skies in San Francisco, the Zodiac killer and Silicon Valley sex workers have in common?
A: They're among the last articles published by tabloid news startup Ratter before it laid off all of its staff writers Wednesday.
Ratter, founded by noted Gawker Media veteran A.J. Daulerio, failed to generate much traction in the highly competitive Internet news market despite its regular coverage of excrement on San Francisco streets. according to the San Francisco Chronicle newspaper.
Daulerio started Ratter in November after his reporting team at Gawker broke the story about Toronto Mayor Rob Ford's drug use and after he had also achieved notoriety in the industry by publishing sexually oriented text messages from retired Green Bay Packers quarterback Brett Favre on the sports website Deadspin, the newspaper said.
Ratter, which had employees in the San Francisco Bay Area and Los Angeles, laid off "every single byline that was on the site," Daulerio told the newspaper.
Instead, the publication hopes to restart itself using freelance writers instead of staffers.
"It’s not shutting down,” Daulerio said.
"For the next couple of months, we want to test out a couple of different directions," he said.
Ratter had raised more than $1 million in venture capital, including cash from Gawker founder Nick Denton and investor Mark Cuban, the newspaper said.
"We made some editorial adjustments today, which unfortunately looks like a bloodbath even though it's three people," Daulerio said.
Ratter's fourth staffer was laid off last week.
"This is the move that we wanted to make at this time," Daulerio said.
Ratter's founder also said he was considering changing Ratter's approach, which he described as "alienating," but not that much.
“Going into the next couple months, (we’ll be) rethinking what’s the best way of getting that concept across,” Daulerio said.
But what happens next may not be entirely up to Daulerio and Ratter's backers.
The highly competitive Internet news business is extremely difficult to crack, according to Randy Giusto, an executive and lead analyst at media analytics firm Outsell Inc.
“I think it’s an experiment for venture right now,” Giusto said, citing the failure of tech news site Gigaom as disturbingly familiar, the newspaper said.
While some sites, such as BuzzFeed and Vox, take off and are able to expand rapidly using venture capital, most fail to generate enough income to be successful on a larger scale.
“Their subscription business didn’t scale enough to pay the business on the event side, and they had some pretty big bills — that’s what I see with a lot of the venture-backed stuff,” Giusto said about Gigaom, which started in 2006.
“It’s really hard to find that inflection point where you become a BuzzFeed -- there seems to be 20 or 30 experiments that don’t happen before somebody becomes BuzzFeed-sized,” he said.
Daulerio conceded that he probably would have to hire new staff to keep the site going but not in the near future, the newspaper said.
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