Buzzfeed to Take Over Online News Site HuffPost
Buzzfeed, an online news and lifestyle site, takes over HuffPost in a deal that brings together two of the hottest digital media companies.
Vendor Verizon Media will become a minority shareholder of Buzzfeed as part of the transaction and invest in the combined company. The two companies will also team up for advertising and content sharing, a partnership they say “will create new revenue opportunities.” The price of this transaction was not disclosed.
Buzzfeed chief executive Jonah Peretti will lead the combined business. He co-founded HuffPost, formerly known as Huffington Post, in 2005 with editor Arianna Huffington and launched Buzzfeed a year later.
HuffPost rose to prominence during George W. Bush’s presidency as a site for liberal bloggers, many of whom contributed for free. Buzzfeed made a name for itself by creating content such as lists and quizzes, which attracted a young audience.
But digital media companies have struggled to attract online advertising funds from tech giants like Facebook and Google. In recent years, Buzzfeed and HuffPost have both laid off staff. In May, Buzzfeed closed its newsrooms in the UK and Australia and cut staff salaries.
Peretti said the new deal would increase Buzzfeed’s leverage, adding HuffPost readers to its audience and allowing it to tap into Verizon’s advertising network. HuffPost is expected to remain a stand-alone brand, alongside other Buzzfeed sites including Tasty and Buzzfeed News. However, a Buzzfeed spokesperson declined to comment on the possibility of job losses caused by the merger.
Verizon Media is part of an American telecommunications giant, known primarily for its pay-TV and mobile phone services. It acquired HuffPost in 2015 by buying AOL for $ 4.4 billion (£ 3.32 billion) and then combining it with Yahoo. A few years later, she reduced property values by nearly $ 5 billion.
Guru Gowrappan, the boss of Verizon Media said that “while considering the possibilities of working together, Jonah and I naturally discussed the property he co-founded, HuffPost”. “We quickly realized that BuzzFeed’s strategy would complement HuffPost’s roadmap, injecting new energy into it and growing the brand into the future. We are deeply invested in the continued success of HuffPost and I couldn’t think of a better partner to take HuffPost to the next level. ”
Times are tough for new media
A few years ago, companies like BuzzFeed and HuffPost were growing rapidly. The business model was simple. Produce viral content aimed at a young and discerning audience and profit from online advertising revenue. It was not as lucrative as they would have hoped it to be.
Ads on digital news can actually be a pretty clunky way to advertise – less targeted than many advertisers would like.
So Facebook and Google, which offer incredibly personalized targeting, are absorbing a massive percentage of online advertising. More than half of the money spent on online advertising is spent with these two companies.
Many small digital media companies were already laying off staff before the pandemic. The Covid-19 pandemic has exacerbated these problems. People stuck at home click more, but advertisers have been careful. Companies that were considered revolutionary only a few years ago are now trying to find a way to survive.
This buyout needs to be seen in that context – the latest attempt to find a better way to make digital media work financially.
Buzzfeed to Take Over Online News Site HuffPost - /10