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Does BuzzFeed Know the Secret?

Peretti at work.  

“I’ve spent over a decade thinking about how ideas spread,” Peretti declared to an audience of over a thousand people at South by Southwest last month. As an engineer of two phenomenal new-media successes—before BuzzFeed, he was part of the team that built the Huffington Post—Peretti qualifies as a celebrity in these circles, and he was in high-aphorist mode as he delivered a speech titled “The Big Power Shift in Media.” Thin and angular as a whippet, Peretti was dressed in a Power Nerd ensemble: collared shirt, beige sweater, square glasses. The night before, he had been out late partying with his old buddy (and BuzzFeed employee) the web-video auteur Ze Frank, but he was showing no ill effects. Saying he was “feeling a little giddy,” Peretti bounded through an energetic presentation, full of grandiose declarations and loopy asides, which he punctuated with his high-pitched cackle.

When he spoke about advertising, he projected iconic print ads by Ogilvy and Bill Bernbach. “When you look at the heyday of advertising, the sort of Mad Men era,” Peretti said, “people thought of advertising as an art form. They built things that told a real story.” If Peretti had one overriding message, though, it was that the audience decides what thrives. “One of the things I realized is that quality is not all that matters,” Peretti said. “Case in point: Which is higher quality, Judaism or Mormonism?”

He flashed a slide that juxtaposed a pair of white-shirted missionaries with a pair of Hasidim. Peretti, who is half-Jewish, performs this bit frequently; it never fails to make audiences uncomfortable. After asking for shows of hands, he nailed the punch line, projecting a chart showing the growth of both religions. “When you look at the performance metrics, there was one Mormon for every ten Jews in 1950, and now there are more Mormons in the world than there are Jews,” Peretti said. “Mormons know that it’s not enough to practice your religion; you also have to spread your religion.”

It’s a message that’s winning converts, but it still leaves a question to be filled by faith. Is it really possible for Peretti—or anyone else—to manufacture virality?

Peretti’s giddiness stands in enviable contrast to the dreary news from more established quarters of the media. Time Inc. has been cut adrift, Newsweek is a magazine no more, and the Times has suffered through yet another round of layoffs. Meanwhile, BuzzFeed’s investors—which include venture funds, the Hearst publishing corporation, and Huffington Post co-founder Ken Lerer—put $35 million into the company last year. Those funds allowed the start-up, formerly little known to anyone over 25, to embark on a series of moves designed to grab adult attention. Peretti hired star political blogger Ben Smith to assemble a news operation, and Washington’s Twitter feeds soon filled with scooplets from a band of frenetic reporters. BuzzFeed has since added sports and Hollywood coverage and even long-form journalism to its sugary listicles.

Smith’s success allowed BuzzFeed to capitalize on the Twitter traffic generated by the 2012 campaign. It has also created ambient prestige, useful if Peretti and his investors want to raise BuzzFeed’s potential acquisition price. But neither BuzzFeed’s reporters nor its busy workshop of list elves contribute directly to the company’s bottom line. Unlike almost every web publisher, BuzzFeed doesn’t run banner advertising, meaning that a huge preponderance of the site’s growing traffic—16 million visitors a month, according to ComScore, though the company plausibly claims higher internal numbers—doesn’t create any revenue in the traditional way. Instead of selling ads against it, BuzzFeed treats the traffic as its own advertisement: a demonstration of what the company could do for any brand willing to pay to place its own articles on the site.

Peretti says that twentieth-century media businesses sowed the seeds of their own destruction by treating advertising as a “necessary evil.” He, by contrast, doesn’t care whether a post is produced by a journalist or sponsored by a brand, so long as it travels. He’s a semiotic Darwinist: He believes in messages that reproduce. “Some editorial content sucks, some ads are awesome,” Peretti told me, “and for many readers this line is even more important to them than church and state.” Within BuzzFeed, he’s stressed that creating custom-designed advertising posts is just as important as writing the hard news and soft candy. “People don’t do good work when they feel like losers and are second-class citizens within their own company,” he wrote in a memo distributed last year.

And so on a recent morning, the most important event taking place at BuzzFeed headquarters was not a visit by Mayor Bloomberg—who had arrived to unveil a tech initiative and then gamely paused to be photographed beneath a large lol sign—but one by Virgin Mobile USA, which had come for a weekly advertising meeting. Ron Faris, the prepaid-cell-phone carrier’s head of brand marketing, had been looking for an inventive way to reach his buying audience—young people—when, as he describes it, “we met the king of viral cat videos.”