Photo: Benjamin Lowy

Perhaps you are unfamiliar with the website BuzzFeed—though this is increasingly unlikely, as it’s currently enjoying a viral moment. The site is a hyper­active amalgam: simultaneously a journalism website, a purveyor of funny lists, and a perpetual pop-culture plebiscite where you can vote on articles with bright-yellow buttons reading lol, wtf, and omg. You can find news there, really serious news by first-rate journalists, about subjects like lobbying scandals and killer drones. You can also find an enormous amount of stuff like “The 40 Greatest Dog GIFs of All Time.” If you’re into that, in fact, there’s an entire section devoted to animals. But you’ll probably never visit that section, because, like odd-couple roommates, BuzzFeed’s articles only nominally live on the website, spending most of their time out of the house as links on social networks like Facebook and Twitter. If this sounds like an awkward living situation, it is; Gawker Media’s Nick Denton, a cantankerous competitor, has predicted that BuzzFeed will “collapse under the weight of its own contradictions.” But venture capitalists have put $46 million into it, and it’s not because they adore kittens.

Perhaps the best way to understand BuzzFeed, though, is as the culmination of a wager its puckish founder, Jonah Peretti, made twelve years ago as a graduate student at MIT. Like a lot of tales of discovery on the Internet, this one begins in a moment of procrastination. In 2001, Peretti, then 27, was supposed to be writing his master’s thesis but instead diverted himself by goofing off online. Nike was promoting a new customizable sneaker; Peretti ordered a pair imprinted with the word sweatshop, prompting an amusing exchange of e-mails with a customer-­service representative. Peretti forwarded the chain to ten friends. It went forth and multiplied, taking on irresistible momentum as it was forwarded from in-box to in-box. Six weeks later, Peretti found himself on the Today show, debating a Nike spokesman about its labor practices.

The rush of creating something viral was vertiginous, intoxicating. Throughout the experience, Peretti related his amazement to a friend, a fellow student named Cameron Marlow. “I challenged him to do it again,” Marlow recalls. Marlow was preparing to write his Ph.D. on viral phenomena; he believed they were impossible to engineer, that the universe of human relations is just too complex to predict what people would share. Peretti set out to prove him wrong. He lost interest in his thesis subject (an earnest study of new teaching software) and immersed himself in network theory.

This was a time when “weblogs” were still a novelty, and celebrity sex tapes came on VHS. Facebook did not yet exist; nor did cell-phone cameras nor most of the other components necessary to create the “Harlem Shake.” But Peretti’s debate with Marlow hinted at a central question of the future. Why, Peretti wondered, was it so difficult to spread some worthy ideas when spurious things like urban myths and dancing-baby gifs took on inexplicable life? “They’re memes,” Peretti told an interviewer, using a then-obscure academic term coined by the evolutionary biologist Richard Dawkins. Successful memes self-replicate, like genes in the cultural ecosystem.

Peretti wanted to fabricate memes, and after years of experimentation, he built BuzzFeed as a shop to do so. He didn’t do it for the news, or the movie gossip, or the cute pictures of pandas. Beneath BuzzFeed’s cheery gloss lies a data-driven apparatus designed to figure out what makes you click. Peretti is aware that if he really has divined that secret—if he can reliably manufacture, at mass scale, content you will want to share—he will have developed an asset of immense value.

Word of mouth is the most elusive force in the $500 billion advertising industry: “like manna from heaven,” the Madison Avenue legend David Ogilvy wrote in a memoir, “but nobody knows how to do it on purpose.” Social networks now allow individuals to spread the word with enormous efficiency. But while Facebook and Twitter, and their competitors, have billions of users, those companies have not yet learned how to get their users to share marketing messages in any predictable fashion. (When was the last time you noticed a sponsored tweet or an ad for “everyday joint relief” on Facebook and felt compelled to pass it on to friends?)

Peretti’s assembly line produces hundreds of posts a day, applying his theories of virality to both original articles and—more important to BuzzFeed’s mission—on behalf of paid advertisers. BuzzFeed’s ads are meant to be just as clickable as the site’s most popular and uplifting posts. Prominent clients include GE, Pepsi, VW—and Nike.

BuzzFeed’s model, known in the industry as “native advertising,” has caused some trepidation among traditional ad agencies, which see its potential to cut out their intermediary role. It’s also the sort of intermingling of editorial content and business—“church and state”—that used to be considered heretical at any respectable journalism institution. But times change, revenue streams dry up, and now other publishers are watching with desperate interest. Prestigious publications like The Atlantic and the Washington Post are playing with strategies similar to BuzzFeed’s. Like a joyful scourge, Peretti is simultaneously fanning the flames that are disrupting the old media business model and promising that he has constructed a new, lucrative one.

Photo: Benjamin Lowy

“I’ve spent over a decade thinking about how ideas spread,” Peretti declared to an audience of over a thousand people at South by Southwest last month. As an engineer of two phenomenal new-media successes—before BuzzFeed, he was part of the team that built the Huffington Post—Peretti qualifies as a celebrity in these circles, and he was in high-aphorist mode as he delivered a speech titled “The Big Power Shift in Media.” Thin and angular as a whippet, Peretti was dressed in a Power Nerd ensemble: collared shirt, beige sweater, square glasses. The night before, he had been out late partying with his old buddy (and BuzzFeed employee) the web-video auteur Ze Frank, but he was showing no ill effects. Saying he was “feeling a little giddy,” Peretti bounded through an energetic presentation, full of grandiose declarations and loopy asides, which he punctuated with his high-pitched cackle.

When he spoke about advertising, he projected iconic print ads by Ogilvy and Bill Bernbach. “When you look at the heyday of advertising, the sort of Mad Men era,” Peretti said, “people thought of advertising as an art form. They built things that told a real story.” If Peretti had one overriding message, though, it was that the audience decides what thrives. “One of the things I realized is that quality is not all that matters,” Peretti said. “Case in point: Which is higher quality, Judaism or Mormonism?”

He flashed a slide that juxtaposed a pair of white-shirted missionaries with a pair of Hasidim. Peretti, who is half-Jewish, performs this bit frequently; it never fails to make audiences uncomfortable. After asking for shows of hands, he nailed the punch line, projecting a chart showing the growth of both religions. “When you look at the performance metrics, there was one Mormon for every ten Jews in 1950, and now there are more Mormons in the world than there are Jews,” Peretti said. “Mormons know that it’s not enough to practice your religion; you also have to spread your religion.”

It’s a message that’s winning converts, but it still leaves a question to be filled by faith. Is it really possible for Peretti—or anyone else—to manufacture virality?

Peretti’s giddiness stands in enviable contrast to the dreary news from more established quarters of the media. Time Inc. has been cut adrift, Newsweek is a magazine no more, and the Times has suffered through yet another round of layoffs. Meanwhile, BuzzFeed’s investors—which include venture funds, the Hearst publishing corporation, and Huffington Post co-founder Ken Lerer—put $35 million into the company last year. Those funds allowed the start-up, formerly little known to anyone over 25, to embark on a series of moves designed to grab adult attention. Peretti hired star political blogger Ben Smith to assemble a news operation, and Washington’s Twitter feeds soon filled with scooplets from a band of frenetic reporters. BuzzFeed has since added sports and Hollywood coverage and even long-form journalism to its sugary listicles.

Smith’s success allowed BuzzFeed to capitalize on the Twitter traffic generated by the 2012 campaign. It has also created ambient prestige, useful if Peretti and his investors want to raise BuzzFeed’s potential acquisition price. But neither BuzzFeed’s reporters nor its busy workshop of list elves contribute directly to the company’s bottom line. Unlike almost every web publisher, BuzzFeed doesn’t run banner advertising, meaning that a huge preponderance of the site’s growing traffic—16 million visitors a month, according to ComScore, though the company plausibly claims higher internal numbers—doesn’t create any revenue in the traditional way. Instead of selling ads against it, BuzzFeed treats the traffic as its own advertisement: a demonstration of what the company could do for any brand willing to pay to place its own articles on the site.

Peretti says that twentieth-century media businesses sowed the seeds of their own destruction by treating advertising as a “necessary evil.” He, by contrast, doesn’t care whether a post is produced by a journalist or sponsored by a brand, so long as it travels. He’s a semiotic Darwinist: He believes in messages that reproduce. “Some editorial content sucks, some ads are awesome,” Peretti told me, “and for many readers this line is even more important to them than church and state.” Within BuzzFeed, he’s stressed that creating custom-designed advertising posts is just as important as writing the hard news and soft candy. “People don’t do good work when they feel like losers and are second-class citizens within their own company,” he wrote in a memo distributed last year.

And so on a recent morning, the most important event taking place at BuzzFeed headquarters was not a visit by Mayor Bloomberg—who had arrived to unveil a tech initiative and then gamely paused to be photographed beneath a large lol sign—but one by Virgin Mobile USA, which had come for a weekly advertising meeting. Ron Faris, the prepaid-cell-phone carrier’s head of brand marketing, had been looking for an inventive way to reach his buying audience—young people—when, as he describes it, “we met the king of viral cat videos.”

Photo: Benjamin Lowy

Virgin Mobile is now a constant presence on BuzzFeed, publishing several posts a week. The company acts not only as a sponsor but also as a collaborator in creating the content, working with BuzzFeed in an arrangement Faris likens to a “newsroom.” For the weekly meeting, Faris sat at the head of a conference-room table, like a managing editor, batting around ideas with a team of BuzzFeed advertising staffers led by Melissa Rosenthal. A curly-haired woman with a nose stud, Rosenthal originally worked her way into an internship at BuzzFeed by posting to the site as an unpaid community contributor and now holds the title “managing creative strategist.” She is 24 years old.

“We have the bait, now we have to bring them into the Virgin Mobile family,” Faris told the meeting. He sometimes likens his BuzzFeed posts to the joke that opens a sales pitch: Maybe it will lead to a “like” on Facebook, and then, using cookies to track the reader, Virgin will deploy display ads on other sites the reader visits. Faris brought up a recent video tied to Valentine’s Day, urging consumers to “break up with their carrier.”

“We got like a 95 percent spike in sales that day,” he reported.

The upcoming week’s paid-for posts included a gag involving unclaimed domain names (“iwonderwhatson.tv,” “bieberin thenu.de”); another about “bros getting friendzoned on Facebook”; a list of pictures of “people that just got screwed by life”; and a G-rated post with a headline that played on the word porn. Rosenthal and Faris particularly liked the last one, which was modeled on the previous week’s big hit: a collection of images written on dusty surfaces, headlined “15 of the Dirtiest Pictures on the Internet.” It already had 97,000 views.

“I think it’s totally clickable,” Rosenthal said.

The site would go on to publish all four of the posts, but the group had to decide which to promote most heavily. The vast majority of BuzzFeed’s traffic comes via links on social-­networking sites, but placing an ad on the home page is still useful, because an important sliver of users—so-called super­sharers—come to the site specifically looking for material as they blast away all day on Facebook. BuzzFeed also has an entire department specializing in social discovery, or “disco” for short, which pushes ads through paid placement on social networks. (Last year, the company acquired a failed dating service that had developed technology that was useful for targeting people on Facebook.) Still, predicting what will go viral requires a fair amount of instinct. This is part of what Virgin is paying for.

At the meeting, Rosenthal got behind the “screwed by life” ad, which featured bloopers like a picture of a dog turd left in someone’s shoe. “These posts tend to do really well,” she said. There was animated discussion about the proper presentation of the turd—someone suggested a “poop arrow.” Rosenthal suggested that adding gifs (truncated loops of animation) to another post would make it more shareable, while Faris policed the boundary of edginess, nixing one joke for being too mean to a celebrity. He seemed befuddled by “bros getting friendzoned.”

“It has a younger demo,” BuzzFeed’s Jen Wolosoff, age 26, assured him.

Brands have always courted youth, but it’s not just demographics that attract advertisers to BuzzFeed’s methods. While Google’s search ads and other targeting technologies are potent tools for directing consumers to products they already want, most advertising is meant to be diffusive—to spread a general positive feeling about a given brand. To date, web advertising has relied mostly on banner ads, which resemble print advertising. But some advertisers aren’t convinced of the efficacy of banner ads, and digital-media consumers get annoyed when they intrude on their reading.

“People gave up on doing great, compelling brand advertising,” says BuzzFeed president Jon Steinberg, the company’s day-to-day business manager. Steinberg has no background in advertising; he previously worked for Google and at finance firms. After he took the BuzzFeed job, he read some foundational texts, like Ogilvy’s Confessions of an Advertising Man, and he’s come to the conclusion that the present moment looks a lot like the early days of television. Back then, traditional ad agencies couldn’t figure out the new medium, so the TV networks stepped into the void with branded content like Milton Berle’s Texaco Star Theater. Steinberg argues that the advertising industry has similarly failed to capitalize on the marketing potential of the Internet.

“The past twenty years have been an absolute low point,” he told me. “Nobody really spent much time thinking about what the creative was going to be. It’s almost like the absolute opposite of what you see on Mad Men.”

Photo: Benjamin Lowy

When real-life ad people hear interlopers summon up the fictive spirit of Don Draper, they tend to react defensively. “There’s a huge presumption that creativity is dead in order for them to bring creativity back to life,” said Rob Norman, a top executive at GroupM, the world’s largest ad buyer. Yet even advertising people admit—if only privately—that their industry struggles to address the Internet. Within most agencies, talent and resources still tend to flow toward the $65 billion U.S. television-ad market. While online revenue is catching up, Google has captured a huge percentage of it.

The value of a banner, moreover, has been driven down by the ruthless price efficiency of automated ad exchanges. The CPM (cost per thousand impressions) for an exchange-traded banner hovers in the range of $1 to $2—and is sometimes less, according to analyst Dan Salmon of BMO Capital Markets. Steinberg says BuzzFeed charges an average CPM of around $10 for its sponsored posts—but nothing extra if a reader shares a post with others.

Despite BuzzFeed’s newsy evolution, advertisers still talk about the site as a friendly, unthreatening space for their brands’ messages. “What is advertising and what is content has really blurred into one,” says Shiv Singh, who handles global digital advertising for PepsiCo Beverages, which uses BuzzFeed for its “Drink It to Believe It” campaign for Pepsi Next. (A recent installment: “18 GIFs That Are Just Unbelievably Beautiful.”) “There are also times,” Singh adds, “when they realize that, Oh my God, we want to cover this even if Pepsi is not paying us as an advertiser.” He points to a BuzzFeed post on the launch of a Mountain Dew morning beverage—a post Singh hadn’t paid for. There’s a lot of this sort of editorial content on BuzzFeed: breathless previews of the new season of Game of Thones or a post touting a video of a “physicist” (actually an ad copywriter) who built a machine to separate the cookie and cream of his Oreos.

In February, Andrew Sullivan took to his popular blog, the Dish, to write a diatribe titled “Guess Which BuzzFeed Piece Is an Ad,” comparing two similarly enthusiastic posts about Sony’s new PlayStation. The same evening, at a contentious debate with Ben Smith, he suggested, “If journalism is not understood to be separate from advertising, then it has lost something incredibly important in a democratic society.”

Peretti argues that Sullivan—whose site is now subscriber-supported—is the outlier, someone with the luxury of drawing lines that the rest of the media can no longer afford. Most publications would give anything to return to the glossy days of Ogilvy and Bernbach, and if BuzzFeed has found a route back, ethical burdens are likely to fall by the wayside. Currently, BuzzFeed is running 38 ad campaigns, which usually consist of about a month’s worth of posts, and cost an average of around $100,000, according to Steinberg. If those numbers are accurate, and its sales stay constant, a back-of-the-envelope calculation suggests BuzzFeed’s ad revenues could be as much as $40 million this year. (The private company won’t release figures.) That would be about a fifth of last year’s digital revenues for the entire New York Times Company.

Peretti makes for an unlikely adman. He was raised in an atmosphere of East Bay liberalism, the son of a Berkeley professor and a criminal-defense attorney, and in his twenties he was something of an armchair anti-consumerist. He read Adbusters and Harper’s, and published a dense academic treatise about advertising and “resisting the logic of late capitalism” in a journal called Negations. Then he became an accidental anti-­sweatshop activist via his viral e-mail. Afterward, Peretti was inspired to write an essay for The Nation predicting that “peer-to-peer networks” would bring “new forms of social protest.” But friends say he was never really ideological. “I like to think about human psychology,” Peretti says now. “How people share things and why.”

After MIT, Peretti moved to New York to take a job as director of research at Eyebeam Art + Technology Center, a sort of cyberpunk collective started by John Johnson, an heir to the Robert Wood Johnson fortune. “It was this moment of nascent Internet culture colliding with the art world,” Johnson says. Peretti began working with what he called “contagious media,” attracting a group of collaborators like Ze Frank, the artist Cory Arcangel, and Duncan Watts, a Columbia University professor who studied how ideas moved through social networks.

“Jonah, at least initially, came very much from the viewpoint of ‘I can engineer things,’ ” Watts recalls. “I came from ‘No you can’t, you just get lucky.’ ”

Peretti’s first attempts to manufacture virality took the form of conceptual pranks, which he devised with his sister Chelsea, now a successful comedian. For one, Peretti set up a telephone hotline that played a recorded rejection, designed to be given out to guys at bars. Another, “blackpeopleloveus.com,” purported to be the personal site of a white couple who were trying much too hard to prove they were down. The stunts garnered TV coverage, including an uncomfortable BET appearance, and a show at the New Museum. Not all of his jokes went over so well. When his staff at Eyebeam produced a hoax website that misrepresented the views of a controversial academic who opposed gun control, Peretti ended up facing a federal lawsuit. (The case was settled, and Peretti declined to comment about it.)

Peretti’s underlying aim was to study the flow of information. He developed a program called ForwardTrack, which he used to map the progression of mass e-mails. Peretti designed the technology for liberal political groups and charities, but when Procter & Gamble wanted to adopt it for use in connection with a detergent promotion, he confessed no hesitation. “I enjoy working in morally ambiguous spaces,” he told an interviewer from the culture-­jamming magazine Stay Free! “I find that is where the most interesting stuff happens.”

Peretti’s contagious media experiments brought him into the orbit of Kenneth Lerer, a wealthy former AOL executive. Originally, they collaborated to advance a political cause—gun control—but Lerer recognized that Peretti’s expertise could have media-business applications. In the miasmic aftermath of George W. Bush’s reelection, Lerer and a business partner, Arianna Huffington, decided to start a news-and-blogging ­website: the ­Huffington Post. Lerer brought Peretti on to handle its technological back end, and he devised many elements key to its success.

Much of the Huffington Post’s content was aggregated from other sources or written by unpaid bloggers, but Peretti had a genius for propagation. The site fostered a vociferous community of commenters, whose chatter constantly refreshed the site’s content. Its technicians mastered search-­engine optimization, gaming Google’s algorithm to land their stories at the top of the results for questions like “What time is the Super Bowl?” The Huffington Post produced an enormous amount of junky but well-trafficked content, most of which never appeared on the site’s front page. Peretti called it the “mullet strategy”—business in front, party in the back—a metaphor that grated on some of his colleagues.

As the Huffington Post grew, surpassing mainstream outlets in terms of web traffic, Arianna Huffington set a course to build what was, in many respects, an old-­fashioned journalism organization. This meant reining in Peretti’s party. “It was a business that had its own politics and limitations,” says Paul Berry, a Peretti protégé who became the Huffington Post’s chief technology officer. “We would have a story that was going insanely viral, on a slow traffic day, and we have to restrain ourselves from promoting it because it was too sexy of a photo.” Peretti was eager to try out new advertising models, but Huffington resisted, fearing that blurring the church-state line would alienate readers.

Despite his frustrations, Peretti profited from the experience. In late 2010, he bought an apartment on Prospect Park West, where he now lives with his wife, Andrea, and their twin boys. A couple of months later, the Huffington Post was acquired by AOL for $315 million. But it’s clear that windfall hasn’t blown away all the old tensions. “Huffington Post was very focused on being a successful media company,” is how Peretti carefully puts it. “And so there wasn’t that much freedom to play.” Huffington declined to comment.

Peretti started BuzzFeed as a side project, in 2006, in partnership with his old boss John Johnson. But long before the Huffington Post was sold, he had shifted his attention to the newer project. Originally, BuzzFeed employed no writers or editors, just an algorithm to cull stories from around the web that were showing stirrings of virality. In return for functioning as a sort of early-warning system, BuzzFeed persuaded partner sites to install programming code that allowed the company to monitor their traffic. (The network now encompasses some 200 sites that serve 355 million users.) This analytical capacity, which the company doesn’t talk about much, has given BuzzFeed an enormous trove of data about what information people are reading and how they are sharing it. This is why one prominent New York digital-media executive described BuzzFeed to me as “a super-big ad tech company with a journalism veneer.”

Peretti rejects the notion that the news operation he has built is, as he has put it, “a hood ornament to lend the site prestige.” It was a business calculation that, somewhat to his surprise, pushed BuzzFeed in the same old-media editorial direction he once chafed at during his time at the Huffington Post. Journalism has clickable appeal on Twitter and brings the kind of readers preferred by premium advertisers. He likes to say that journalism works best on social networks with “scoops and quality reporting,” not aggregation. But the head of BuzzFeed’s data-science department frankly told me that the company has found it to be extremely difficult to make a news item go viral.

It turns out Peretti’s vaunted algorithm revealed an obvious truth: People like upbeat, even childlike content. That’s why BuzzFeed practices its own version of the Huffington Post’s mullet strategy—though now the party is all up front. The authors who draw the most traffic on the site are people like Matt and Dave Stopera, twentysomething brothers who drive millions of hits a week to posts like “The 30 Happiest Facts of All Time,” featuring ideas culled—some say plagiarized—from the viral swamps of 4Chan and Reddit. For BuzzFeed, the happiest fact is that such concepts are easily repurposed as advertisements. Matt Stopera’s “100 Incredible Views Out of Airplane Windows” has been viewed more than 2 million times since it was published in 2011. It was followed by last year’s JetBlue ad “The 50 Most Beautiful Shots Taken Out of Airplane Windows.” Some tropes are serially repackaged: Last April’s “10 Unbelievably Beautiful Places You’ve Probably Never Heard Of,” for BBC America, begat “10 Beautiful Places in the World That Actually Exist,” for Pepsi Next, which begat “10 Places That Are Almost Too Beautiful to Be Real,” for Campbell’s Soup. In late March, the dog caught its tail, as Dave Stopera published a new post: “28 Incredibly Beautiful Places You Won’t Believe Actually Exist.”

From these creatively modest beginnings, Peretti has talked of building “the agency of the future for a social world.” Last year, he hired Jeff Greenspan, an ad-industry defector, to devise new premium formats as BuzzFeed’s chief creative officer. Though he previously worked for agencies like BBDO, Greenspan says Peretti was more interested in stunts he pulled in his spare time, like painting “tourist lanes” on Manhattan sidewalks. BuzzFeed’s ad department includes people like the authors of Unbaby.me, a tool that removes parental oversharing from Facebook, and Guys With Fries, a Tumblr featuring “selfies” of dudes holding McDonald’s fries in various states of undress.

Peretti believes that certain people have a knack for creating virality. But it’s an extraordinary task, which gets even harder when the content is weighed down by a sales message. “Advertising people love advertising, but everyone else hates advertising,” says Gerry Graf, a former chief creative officer at Saatchi & Saatchi and TBWA\Chiat\Day, who now has his own firm. “People hate advertising so much that they had to make inventions so they didn’t have to look at it.”

There are few precedents for phenomenally successful viral advertising, at least in the “Where’s the Beef?” sense. Two always come up: a series of web ads for Old Spice with that muscular, bare-chested black guy, and the “subservient chicken” website, created for Burger King, which featured a costumed character who appeared to respond to typed commands. “That was like lightning in a bottle,” says Benjamin Palmer, whose firm, the Barbarian Group, created the chicken site. “It’s not going to happen again.”

Memes are easy to make, but virality depends on novelty, cleverness, and luck, all of which thwarts the duplicative craft of advertising. Peretti, however, says BuzzFeed has developed a new formula. It’s actually, literally, a formula. In speeches, he projects a simplified version of the epidemiological equation for viral reproduction, expressed as R = ßz. (in epidemiology, the z represents the number of people who come in contact with a contagious individual, while ß represents the probability of transmission.) This is the starting point of a theory that Peretti calls “Big Seed Marketing.”*

“To me, advertising is fascinating, partly because it’s part of culture, and partly because it sucks,” he told me one evening in February. “There’s a bit of the geek mentality, which is that when you see something that’s broken, you try to fix it.” We were out at a Soho sushi bar with Duncan Watts, who left academe a few years ago and now works at Microsoft. He serves as BuzzFeed’s official “science adviser,” consulting over regular beer nights.

“We have this very Newtonian view of causality,” Watts, a square-jawed Australian, shouted over the din. “Like, billiard balls hitting each other, that’s the most complicated thing that we can wrap our heads around.” But his research suggests that the commonly understood, Gladwellian model of virality, with its linear progression through influencers and tipping points, doesn’t really reflect the way viral messages spread. Instead, he says, they tend to grow from seeds scattered in little clusters, popping up all at once like toadstools after a rainstorm. BuzzFeed has found its most popular posts don’t take off because Kim Kardashian shared them but because many people did in small groups—the median figure is just nine Facebook friends.

A real virus is constrained by biology. A disease begins at an origin point—its Patient Zero—and it will continue to spread so long as its reproduction rate stays above one, meaning that each person communicates it to at least one other, on average. If its reproduction rate drops below one, the contagion will die out. But a marketer doesn’t have to be constrained by nature’s rules. Seeds can be planted in many places at once, and even if they reproduce only at a fractional rate, that can add up. Watt’s calculus looks like this: n = pN(1+ R+ R² + R³ + … ) = pN/(1- R).

Watts and Peretti first set forth their theory in a co-authored 2007 Harvard Business Review article, “Viral Marketing for the Real World,” partly basing it on data from an experimental ad campaign at the Huffington Post. Watts has since continued to refine his research. His standard is that for every ten views an advertiser pays for when it buys a viral ad, it should get two shares. (“There is no free lunch,” Watts likes to say, “but maybe you can have a cheap snack.”) Peretti is convinced he can engineer a higher reproduction rate. “You can make money with that,” Watts says. “If they are predicting 20 percent of the variance and the competition is predicting 10 percent of the variance, they’re kicking ass.”



*This article has been updated to clarify Peretti’s “Big Seed Marketing” formula.

Peretti’s formula for virality really adds up to a more mundane sales pitch: Buy lots of ad impressions and realize a modest, if unpredictable, viral bonus. And BuzzFeed’s creative process is a familiar one, still more art than science. It relies on human talent: Greenspan and his team fancy that they’ve proved themselves as viral pranksters on the playgrounds of Twitter and Tumblr. “Nobody wants to be a shill for your brand,” Greenspan says. “But they are happy to share information and content that helps them promote their own identity.”

Where BuzzFeed gets scientific, Peretti says, is after publication. “We understand how the system works,” he told me. The company practices “viral optimization,” Peretti’s term for promoting the messages that work and ruthlessly starving those that don’t. BuzzFeed has released some selective data about the fractional proportion of sharing it achieves—its so-called “lift”—and claims that for the median advertising post, ten paid views yield around three shares. Peretti adds that the brands that have embraced the format most enthusiastically have better results. Virgin Mobile’s ratio of shares to paid views is better than one to one.

In BuzzFeed’s weekly list of top posters, Virgin Mobile consistently outperforms many editorial staffers. But that’s not an entirely fair comparison, because BuzzFeed pays to place sponsored posts in Facebook’s news feed and on other social-networking sites. (For a company that boasts a formula, this might seem a pretty brazen cheat, but that’s viral marketing in the real world.) Even with promotion, though, none of the Virgin Mobile posts I saw in the pitch meeting did very well. Weeks later, the best-performing—the one about people who were “screwed by life”—had been shared 346 times on Facebook. The one about domain names had just seven shares. Ron Faris of Virgin told me that advertising on BuzzFeed is “a game of singles and doubles.”

Yes, the hits can add up: Virgin Mobile’s posts received around 1.1 million views for the last week in March. Other campaigns running on the site during that period, however, showed smaller results: Geico, 140,000 views; GE, 65,000 views; Pepsi Next, 44,000 views. These numbers don’t quite match the hype around native advertising, which might be why ad agencies sound much less enthusiastic about the medium’s transformative potential than publishers do.

“Can BuzzFeed be a significant, sustainable business? Yes,” said Rob Norman of GroupM. “But is BuzzFeed the shape of things to come? I don’t think so.” Designing custom ads is a labor-intensive business, difficult to do on a mass-produced scale, and it’s probably not a viable option for companies that lack tens of millions in venture capital. So it may be difficult to follow BuzzFeed’s example, and for publications with a more reverent view of traditional journalism, it may be foolish to try. “BuzzFeed is an opinionated publication with a point of view, and their opinion is cats are funny,” says Palmer, whose firm has worked with the site in the past. But, he adds, “if everybody starts doing that, they’re going to compromise what makes them attractive to their audience from a journalistic point of view.” The Atlantic’s experience earlier this year offers a cautionary counter­example: It was forced to apologize amid great controversy after it published a lightly differentiated online advertorial full of fulsome praise for the Church of Scientology.

Social networks, with their unforgiving chorus of voices, can be dangerous places for brands—as Peretti knows from experience, viral stunts can backfire. But ad-world veterans point out a more immediately obvious drawback: Most advertising produced by publishers just looks amateurish. “Ninety percent of it is really bad, and it makes creative agencies cringe,” says Jason Clement of TBWA\Chiat\Day, who oversaw the digital portion of the successful Old Spice campaign when he was with a previous firm. “I’ve never seen anything on BuzzFeed that felt ownable by the brand. That didn’t feel like LOL, OMG.”

In my conversations with agency executives, I heard this observation many times. BuzzFeed’s advertisements may draw traffic, but are they really selling anything? After all, even Faris admits that he uses BuzzFeed to introduce Virgin Mobile to an audience—only to hit them with a banner ad elsewhere. “It’s not enough to get someone’s time with a bunch of cats,” Gerry Graf says. “It’s not enough to entertain somebody, if you’re actually trying to do marketing.”

Peretti usually presents a cheerful exterior, but that kind of talk inflames his ego. “Could you make a list of cute animals that gets 5 million views?” he snapped when I mentioned Graf’s comment that night at the bar. “It’s actually really hard.” After a moment, he switched tracks: “It’s actually better for us if people don’t take us seriously.”

Peretti complains about “obstructionist agencies,” and when he looks at advertising—with its four dominant holding companies, rococo bureaucracies, and reliance on a lucrative television medium now threatened by ad-skipping technologies—he sees an industry ripe for disruption. He has experience with overcoming dismissal: News organizations treated the Huffington Post with condescension right up to the moment of the stunning AOL purchase. As that precedent suggests, it may be that Peretti only needs to prove his concept to one buyer: Mark Zuckerberg or some other acquisitive tech billionaire. Rumors of sale talks have circulated for years.

But the company’s value, like its potential to upend media and advertising, will ultimately depend on whether Peretti can deliver on the immodest proposition he made back at MIT. When I called Cameron Marlow, the counterparty to his wager—and now the head of data science at Facebook—he told me his friend had evolved in his views. “I think he’s clearly trying to build a business around this idea,” he said, “that maybe you can’t predict, but you can create the right environment for media to be contagious.” In other words, he’s trying to bend nature, not control it, a milder ambition. As Marlow pointed out, none of Peretti’s subsequent stunts ever quite managed to recapture the forward momentum of that first, world-sweeping e-mail. Except, perhaps, the idea of BuzzFeed itself: a meme that iterated, mutated, and reproduced until all of a sudden it was everywhere. Of course, virality can die out just as quickly as it emerges.

“I think the bet,” Marlow says, “is still outstanding.”