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Ozy Media is accused of impersonating a Google executive, vastly inflating its web and video traffic and raising millions of dollars over a faked “Potemkin village” of media content, according to an investigation published Sunday by the New York Times.
The site was founded in 2013 by Carlos Watson, its CEO, and Samir Rao, now COO. According to the article by media columnist Ben Smith, who said he previously met Watson when he was the editor of Buzzfeed, Rao impersonated a Google executive on a fund-raising call with Goldman Sachs, supposedly vouching for the success of Ozy’s YouTube channel.
The vouchsafe was critical because Goldman was considering a $40 million investment in Ozy.
Watson admitted to the incident, and wrote the Times that Rao had experienced a mental health crisis on the call.
“Samir is a valued colleague and a close friend,” Watson said. “I’m proud that we stood by him while he struggled, and we’re all glad to see him now thriving again.”
Goldman did not make the investment. But the article said Google had alerted the Federal Bureau of Investigation, and the bank had received an inquiry from law enforcement.
Furthermore, the article stated that Ozy Media hugely inflates its web traffic figures, which tie back to sales and, of course, the overall value of the company.
According to Comscore, Ozy reached nearly 2.5 million people during some months in 2018, but only 230,000 people in June 2021 and 479,000 in July.
In a 2019 news release, the company said it had 50 million monthly unique users, according to the Times. One
former employee, Eugene Robinson, said he clashed with Watson over the stated web traffic figures after comparing them to public sources, and was fired earlier this year. He called the company a “Potemkin village.”
Other inflated claims relate to video views. According to the Times, Amazon last week demanded that the company remove billboards in Los Angeles that tout “The Carlos Watson Show” as “Amazon Prime’s First Talk Show.” But the show is not tied to Amazon Prime. “Ozy apologized and promised to take down the signs,” an Amazon Prime Video spokesman said.
The Times quoted Jason Urgo, the head of the analytics firm Social Blade, saying that some of Ozy’s YouTube videos have more than a million views but fewer than a hundred comments, “an unusual ratio for YouTube that suggests the views aren’t coming from regular YouTube watchers.”
Watson responded to TheWrap’s request for comment saying that Smith had a conflict of interest and should not have written about his company, since Smith was involved in acquisition talks when he was editor of Buzzfeed.
“It’s a bullshit ad hominem attack,” he said. “If we’ve got a bullshit company, then why would you as face of Buzzfeed sign off on written offer for hundred of millions of dollars for Ozy? Are you dumb?”