Confirmed by Vigilant Futures director Arvind Ramanathan in a telephone conversation yesterday.
Canadian Economic Press or CEP News is a curious news operation with a puzzling business model.
It’s registered as a numbered company with one director, Darren Corbett, who has no background in news and no internet business profile. What’s more, when CEP News needed someone to explain to the Canadian Embassy in Washington why it should be given official accreditation, it didn’t send Corbett but rather Matthew Stone, its top editor, who is also an unknown quantity in media circles.
According to an embassy spokesman, the diplomats had their doubts about how CEP News could compete against competition like Reuters, Bloomberg and Dow Jones, but Stone and Marshall Taylor, the Washington correspondent who is also listed as a company director on LinkedIn, convinced them that it was a viable business operation. Taylor, by the way, does have a background in financial journalism unlike most of the other very young staff hired by CEP News.
When CEP News suddenly closed its Washington bureau in April, it told the embassy staff that its investor had pulled out and it hoped to be back when it found new sources of funding. Last week, a commenter revealed here that the London bureau has also shut down.
Since the closings, CEP News has stopped describing itself as “one of Canada’s fastest growing news companies.” Instead, it is going with “one of Canada’s most established sources for global economic and financial news,” which it very clearly is not, given that almost no one has heard of it.
In fact, when I first wrote about Canadian Economic Press News, the blog post rose so high in the Google rankings that Paula Midena, director of sales and marketing, moved almost immediately — and unsuccessfully — to set up a Wikipedia page for the company. (Scroll down to see the discussion)
As a privately held company, CEP News is, of course, not obliged to provide information to outsiders, but transparency is a quality that helps news organizations while lack of transparency is a hindrance. It’s hard to run a business asking people questions and then refuse to answer questions yourself.
When CEP News closed its Washington bureau, the Senate Press Gallery was asking questions about where the Canadian operation’s revenues came from. Had CEP News not shuttered the D.C. office, it would have had to provide more information.
In the mean time, it remains unclear just how CEP News earns money, if indeed it does. It has the requisite Google Adsense ads and some other display advertising but given its low profile and lack of page views, those can’t be bringing in any serious money. As for subscriptions, it’s hard to see why any major business would subscribe and non-major businesses aren’t going to be paying hefty subscription fees.
So the questions remain: Why start and finance a news operations that almost certainly has to be losing money? Why be so secretive about it? What does one have to gain from running an operation like this?
If you have any theories or, better yet, facts, please get in touch with me at ann-dot-brocklehurst-at-gmail-dot-com. Please do not post unsubstantiated rumours.
Update: According to sources, the main figure behind Canadian Economic Press is Marco Gomez, whose background is finance in “the City,” London’s version of Wall Street. My working theory is that CEP News’ main revenues do not come from the news service but from some kind of trading/financial activity. Dito, all those other similar news services (see comments.)
It all reminds me of Geosign. You emphasize one business — online publishing — while really making your money somewhere else. There’s likely some kind of loophole being exploited for a limited period of time, namely until others wise up and figure it out.