Facebook CEO Mark Zuckerberg. AP Photo/Noah Berger
The media industry's worst fears about Facebook's huge algorithm tweak are coming true.
The women-focused publisher LittleThings is shutting its doors, in large part because of Facebook's recent move, the company's CEO, Joe Speiser, told Business Insider.
LittleThings' demise was first reported by Digiday's Lucia Moses.
LittleThings focused on a mix of feel-good news and service content along the lines of Valentine's Day dinner recipes. The company also produced a regular slate of live video content on Facebook, even featuring celebrity guests.
Since launching in 2014, LittleThings had amassed over 12 million Facebook followers, and its videos regularly generated thousands, if not millions, of views.
But Speiser said the recent algorithm shift, which Facebook has said was designed to tamp down content that is consumed passively — and would instead emphasize posts from people's friends and family — took out roughly 75% of LittleThings' organic traffic while hammering its profit margins.
Back in 2016, Speiser told The Wall Street Journal that he was highly optimistic about Facebook and its desire to help web publishers.
Now, as one source close to the company put it: "Facebook is the destroyer of worlds."
LittleThings was actually born out of a pet e-commerce venture. In 2015 the company raised an undisclosed amount of cash through debt financing as it shifted toward becoming a full-fledged media company, according to TechCrunch.
This past November, LittleThings had hired a bank to explore strategic options.
Here's the memo the company issued Tuesday:
"Urgent: LittleThings Closure"...
Today, February 27th, LittleThings will be permanently closing its doors. It comes after 8 years of starting as an e-commerce company, and then 4 years ago as LittleThings. I've watched a rag tag group of talented hardworking individuals create one of the largest and most emotional brands on Facebook. So many of you have become super stars in the social media space it's incredible. I've never felt so proud and blessed to be part of such an amazing group of people. It pains me to have to write this and hang up our hat, but there are only so many hits a digital media company can afford to absorb in this day and age, and we just exceeded ours.
As most of you remember, we took some especially large setbacks in August 2017, but were able to quickly right the ship, and rebuild the company with new business lines and revenue streams. Instead of waiting for the next Facebook newsfeed update, we entered into a sale-process in November that would allow us to merge with a large media entity that could bring our business diversification of both traffic and revenue. By early February we had numerous acquisition offers for LittleThings that would have generated a substantial return for everyones' options, as well as guarantee their careers well into the future.
Unfortunately, as we were receiving those offers a full on catastrophic update to Facebook's algorithm took effect. The prioritization of friends/family content over publishers was the last straw. Our organic traffic (the highest margin business), and influencer traffic were cut by over 75%. No previous algorithm update ever came close to this level of decimation. The position it put us in was beyond dire. The businesses looking to acquire LittleThings got spooked and promptly exited the sale process, leaving us in jeopardy of our bank debt convenants and ultimately bringing an expedited end to our incredible story.
What happens to the LittleThings brand, we all know and love, is uncertain at this point. It's my deep hope that we can find a way to resurrect it and reemerge from the ashes with a new will, but that may take many months.
What this means for you:
All wages earned will be paid with no exceptions, payroll has already been submitted for tomorrow. Marcella is preparing information on healthcare (Cobra), and other important transition documents. While severance will not be up to us, as the bank now has control over the outgoing payments, we feel confident that everyone should be seeing additional money soon. We will get the specific amounts after the bank transition is complete. (This may take a few weeks)
What this means for the office:
You can take as long as you need, and come back tomorrow as well, the doors will not be locked. The only restriction, and it's an important one, is that all electronics, cameras, computers, etc stay behind. Anything non-personal removed from the office will be against the bank's policy and could jeopardize severance.
Marcella, Gretchen and myself are available tonight and all day tomorrow to talk through this with any and all of you. I'm also more than willing to be a reference for any of you when necessary. In addition I'm close with a media recruiter with which I can help you connect if you are interested. Please make sure you lean on the resources we make available. What happened here is not any of your faults, and I don't want this to slow down your career growth and success.
For LittleThings.com and social accounts:
We won't be shutting down the site yet. I want to make sure we have enough time to inform our readers, fans and viewers that LittleThings is closing. If you want to do one final farewell video, editorial post, FB/IG post, etc now is the time. I've also paid to keep all of your emails open for another 30 days so you have that additional access.
If any press reaches out please forward them over to firstname.lastname@example.org and one of us will answer it.
Again, if you want to talk, please don't hesitate. It's going to be an emotional time for all of us, please reach out to anyone struggling and be their shoulder.
While LittleThings may be winding down, the friendships, and connections we have made here will continue to endure.
Joe + Gretchen