• by Erik Sass , Staff Writer @eriksass1, December 8, 2016

Big legacy media publishers have been working to expand their reach among younger adults by buying stakes in, or acquiring outright, hopeful prospects from among a new generation of online publishers.

With price tags in the eight and nine figures, these deals represent a big gamble – namely that successful publishing startups, which achieved scale via social media platforms, can continue to thrive as these social channels become narrower and more competitors appear.

In the case of the Daily Mail and General Trust’s acquisition of the “Elite Daily,” that gamble did not pay off, judging by the company’s latest financials.

As Recodereports, the British publisher of the Daily Mail has declared the acquisition a total loss, writing off the value of its investment as $31 million; previous reports had put the price in a range between $40 million and $50 million.

That’s a pretty rapid descent for Elite Daily, which made its name by winning an audience measured in the tens of millions with social media-friendly viral content, mostly targeting tech-savvy young men, including a fair number of college students. (It began life in 2012 as a blog created by students at Pace University.)

Benefiting from Facebook’s distribution, content created by unpaid contributors and cheap monetization by ad networks, Elite Daily built huge audiences with controversial articles boasting titles such as “Abercrombie & Fitch CEO Explains Why He Hates Fat Chicks,” published in May 2013 — and which eventually led to the executive in question stepping down.

But it would appear that social media success can be fleeting.

After achieving a fairly regular traffic of around 35 million unique visitors per month in late 2014, the company was acquired by the Daily Mail and General Trust in a bid to bolster its millennial reach, especially in the U.S., in January 2015. However, by November 2015, this traffic had fallen by half, to an average of around 16 million per month.

The DMGT write-off suggests traffic has cratered even further since then, possibly due in part, to Facebook’s tightening of the rules governing content distribution.