Audit Notes: Waywire and Booker, One Weird Trick, souped-up gentrification

The sketchy startup is still raising money from investors

Talking Points Memo has a nice follow-up on the NYT’s Cory Booker/Waywire story, reporting that the “ridiculous” company, despite having already buck-raked billionaires Oprah, Eric Schmidt, and Reid Hoffman, is still trolling for investors cash.

Clarke told TPM she would confirm whether or not Booker had met with potential investors since his campaign began. But minutes later, she called back to criticize TPM’s use of the word “ridiculous” in the headline of Tuesday’s story about Booker and Waywire. She subsequently sent TPM an email detailing “the success points that #waywire is experiencing.”

“To folks who understand the economics and progression of start-ups and early-stage companies, this is strong progress,” Clarke wrote.

Clarke pointed out that the company is still in beta testing, that it has created a proprietary technology allowing users to “assemble video collections using videos from anywhere on the Web,” and that the website’s number of registered users is up to 29,000.

“The success points that #waywire is experiencing” may be the worst PR-ese I’ve ever heard.

Read Noam Scheiber on Booker’s worldview, while you’re at it.

— Slate is good to investigate one of the junk-ad purveyors that you see around the interwebs. Ever noticed the “One Weird Trick” ads?

These crudely drawn Web advertisements promise easy tricks to reduce your belly fat, learn a new language, and boost your credit score by 217 points. They seem like obvious scams, but part of me has always wanted to follow the link. What, I wonder, makes the tricks so weird? How come only one trick (or sometimes “tip”), never more? Why are the illustrations done by small children using MS Paint? I’ve never pursued these questions, though, because a fear of computer viruses and identity theft has always stayed my hand. One curious click, I imagine, and I could wake up hogtied on an oil tanker headed to Nigeria…

What really puzzled me about this formula—as I sat through video after video, alternately bored and enraged—is that there’s no way to shut the guy up and just buy the dick pills already. The videos were all 15 to 30 minutes long, and you had to sit through the whole thing before you can hand over your credit card. I’d thought the point of all this teasing was to inspire impatience—provoking customers to pay up to end the suspense. I was wrong.

It turns out, unsurprisingly, that the ads are selling snake oil for big markups. And these kinds of scams run all the time on credible news websites.

— The Journal has a good page-one piece on how investors are increasing the pace of gentrification in order to up the value of their properties.

One investor in Oakland has bought 200 houses and plants trees, repairs fences, and spruces up neighboring houses it doesn’t even own:

The company’s motives aren’t altruistic. They are part of a broader strategy designed to upgrade the neighborhood to attract higher-income residents who, in turn, will help boost properties’ values.

In past housing recoveries, investors purchased foreclosed homes and often tried to flip them for a quick profit. But investors with a different approach have plunged into the housing market this time. They have assembled billions of dollars to acquire homes and upgrade them. Their aim is to gentrify communities and profit later when rents and property values rise…

“It can take generations for neighborhoods to change, but investors have the potential to accelerate the process, especially because they may have the cash on hand to purchase lots of homes at once, even in tight credit markets,” said Ingrid Gould Ellen, co-director of New York University’s Furman Center for Real Estate and Urban Policy.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , ,