How Reuters Underwrote Andrew Breitbart's Budding Right-Wing Web EmpireS

Reason contributor Greg Beato has a fascinating analysis of conservative baby-mogul Andrew Breitbart's content deal with Reuters—every time Breitbart.com links to a Reuters story, his cash register rings. And maybe every time Drudge links to one, too.

Breitbart launched his news aggregator site as a way to monetize traffic generated by the Drudge Report. Why send all those ravenous Drudge readers to newspapers by linking to commodity-news stories when Breitbart could subscribe to newswires himself, start up a site, host the stories on them, and—as Matt Drudge's understudy—send that traffic to his own site? It's a smart idea. Another smart idea is to charge a company like Reuters for linking to their stories, which is what Breitbart started doing in October 2005, according to Beato.

Instead of charging Breitbart for the right to host their stories—an arrangement Breitbart has with the Associated Press and a variety of other wire services—Reuters started paying him to post headlines and summaries of Reuters stories with links to the Reuters web site. The downside is that Breitbart loses potential ad revenue when a reader clicks through to the Reuters stories, because they see ads served by Reuters. The upside is he gets paid.

All of which is an interesting business story, one that neither Reuters nor Breitbart would comment on. But Beato engaged in some internet forensics, and was able to draw the Drudge Report into Breitbart's little arrangement. It turns out that all the Reuters links on Breitbart's site carry the same bit of code in the URL—either RPC=22 or RPC=23. The only thing a Reuters spokesman deigned to confirm to Beato was that those codes are "a parameter that enables [Reuters] to track clicks from URLs on our newsletters, from/to partner sites, etc." So a Reuters story with a URL containing either of those codes, Beato deduces, is one that Breitbart gets paid for linking to. So do any Reuters stories linked directly from the Drudge Report contain the magic money code?

In 2006, the Drudge Report linked to Reuters.com 1888 times. At this point, it trailed only Breitbart.com as the Drudge Report's favorite destination. Meanwhile, 1852 of those links, or 98% of them, contained the RPC strings that Reuters was presumably using to keep track of how much traffic Breitbart was sending it.

Interesting! Of course, as Beato notes, there's nothing particularly nefarious about the way such an arrangement might affect Drudge's, or Breitbart's, news judgment. Reuters is a purveyor of breaking and commodity news, and their stories are usually just as useful as the AP's or any other wire's. So the fact that, when Breitbart is at the helm of the Drudge Report, he gets a nickel for linking to a Reuters story about, say, a hurricane doesn't necessarily mean there's an ethical issue at stake. Still, it's...interesting.

And it doesn't really matter anymore, because Breitbart quit his side-gig as Drudge's alter ego more than a year ago—at least if you trust what you read on Gawker. Indeed, the URL to the Reuters story currently linked as the lead item on the Drudge Report doesn't contain the RPC code that's going to put Breitbart's kids through college.

Beato sources his information about the Reuters deal to "documents generated in a 2005 legal dispute between Breitbart and two other parties," which turns out to be a federal lawsuit that two of Breitbart's former partners in an advertising venture filed against him. In 2005, Breitbart got together with Bradley Hillstrom and Brian Cartmell, the producers of Michael Moore Hates America, to form GenAds, a company that was to exclusively sell ads for Breitbart.com. When Breitbart struck the Reuters deal, he cut GenAds out of the picture on the theory that the paid links were a content deal, rather than advertising. Cartmell and Hillstrom sued, and the case was settled in 2006.

We looked through the court documents, and here's the reason the trio thought GenAds would be a good idea—Hillstrom personally knew the folks in charge of the massive ad budgets at the National Rifle Association, Wal-Mart, Best Buy, etc.:

How Reuters Underwrote Andrew Breitbart's Budding Right-Wing Web EmpireS

And here's an account of the night that the deal to create GenAds was sealed:

How Reuters Underwrote Andrew Breitbart's Budding Right-Wing Web EmpireS

So, in case you were wondering, no—there is no vast right-wing conspiracy. Just a series of dinners with powerful GOP politicians at which ideas to make people like Andrew Breitbart wealthy beyond imagination are discussed. Move along.