FORTUNE — Jonah Peretti has made a massive bet that smart people — specifically writers and editors — are key to the success of a next generation media company. User-generated content by the likes of unpaid bloggers and anonymous internet users — the secret sauce of many Web 2.0 startups — just isn’t enough.
Speaking October 15 at the Pivot Conference in Manhattan, the ebullient Buzzfeed cofounder said he’d even turned down some early investors who’d asked him to staff the site with freelancers and rely more heavily on user-generated content. Instead, he has been ramping up his editorial staff for Buzzfeed, the media startup he cofounded three-and-a-half years ago.
That’s looking like an increasingly smart decision as tech companies such as LinkedIn (LNKD) and Tumblr have begun to hire editors and Google’s (GOOG) YouTube has begun funding professional content producers. “Now these platforms are all saying, ‘how can we get good content that goes beyond user-generated content?’” said Peretti.
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Thanks to signature viral hits like 40 Things that Will Make you Feel Old as well as an increasing amount of news and political reporting, Buzzfeed has nearly doubled the number of unique visitors to the site, which was 11.5 million in September according to Comscore (SCOR), up from 6.6 million a year ago. (For perspective, consider that 18.7 million people visited Washingtonpost.com in September.) And that figures misses a third of Buzzfeed’s traffic, which, says Peretti, comes from mobile.
You may remember Peretti from his first accidental brush with Internet stardom back in 2001 when, as a grad student at MIT, he ordered a pair of Nikes (NKE) embroidered with the word “sweatshop.” After Nike refused to fulfill his request, the chain of emails he exchanged with an unlucky customer service representative became a viral hit.
That was before Facebook (FB) and even Friendster, when an email forward was as social as the web got. I think I got 25 copies of that email exchange delivered to my Inbox. As for Peretti, he ended up on the Today Show, debating sweatshop labor with Nike’s head of global public relations.
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More than a decade later, Peretti has made a career out of divining the algorithmic and emotional formulas for creating a viral hit. He’s a master at distributing content on the social web. He has taught at NYU and the Parsons School of Design and he cofounded The Huffington Post (AOL) before taking on the challenge of building a next-generation social publisher. With $27 million in venture funding, he and cofounders John Johnson and media heavyweight Ken Lerer have amassed a click-machine that publishes entertainment, news reporting, and branded content in addictive and sharable packaging.
Even to the discerning mind, it can be hard to tell the difference between the three. A quick reader test: Which one of the following three headlines drawn from Buzzfeed’s October 16 front page are you most likely to read? Which one are you most likely to say you’ve read—and share with friends? And which one is the advertisement?
A. Team Obama looks for Debate Redemption
B. Octomom got drunk, proceeded to breastfeed babydolls
C. 17 Animals Who are Already Prepared for Halloween?
The advertisement, in case you missed it, is C; the author, labeled Campbell’s (CPB) Go Soups, is a “featured partner.” The piece falls in the news stream but is a slightly different color than the other items. And a quick scan reveals that it has just as many “likes” and “shares” as the other Buzzfeed stories.
Peretti has skipped banner ads entirely. Since the beginning of the web, “people have said they don’t work but they use them anyway,” he said. He opted for “native advertising,” which looks a lot more like Twitter’s promoted tweets than traditional web advertising. It seems to be working; Peretti says Buzzfeed’s revenues have quadrupled in the past year. (He did not say exactly what those revenues were, however.)
Next up, Peretti will tackle video. In September, he hired web video pioneer Ze Frank, who will build and staff a Buzzfeed studio in Los Angeles. Frank has already begun to turn existing popular posts into videos. (The current breakout hit: The Angriest Babies in the World has received 4.5 million hits — a massive amount in a world of potentially lucrative pre-roll advertising.) He will extend this to original video pieces that, thanks to a human touch, scream out to be shared.
