[ad_1] BuzzFeed Inc. is close to an agreement to go public through a merger with a specialist acquisition company, according to people familiar with the situation, as part of a plan to consolidate with other
BuzzFeed Inc. is close to an agreement to go public through a merger with a specialist acquisition company, according to people familiar with the situation, as part of a plan to consolidate with other players in the digital media.
BuzzFeed founder and CEO Jonah Peretti could announce a deal with 890 5th Avenue Partners Inc., a blank check company named after the headquarters of Marvel’s Avengers superheroes and founded by investor Adam Rothstein, as early as this week, people said.
The merger deal would generate capital to pursue additional acquisitions, including Complex Networks, a digital publisher specializing in streetwear, music and pop culture. BuzzFeed is fighting for greater scale to better compete for online advertising dollars with tech giants like Alphabet Inc.
com Inc. and Facebook Inc.
Information earlier reported on BuzzFeed plans to buy from competitors, including Complex Networks, as a public company.
The deal to go public with BuzzFeed marks a turning point for Mr Peretti, a former teacher who has transformed his affinity for stunts that have gone viral on the internet into a curvy career as a digital media entrepreneur. The 47-year-old executive helped found HuffPost alongside Arianna Huffington in 2005 and started working on BuzzFeed in a small workspace in New York’s Chinatown neighborhood in 2006.
Mr Peretti hopes the measures to acquire Complex and other companies will give the combined entity enough scope to grow despite the growing dominance of Google and Facebook in the digital advertising industry, people said. . BuzzFeed will also look to continue to grow in other areas, including e-commerce and affiliate trading, the practice of making money selling products and referring potential customers to websites that sell products. products likely to interest them.
Even with the addition of Complex and other companies, there can be no assurance that BuzzFeed will be able to further expand its share of the digital advertising business. In recent years, most of the growth has gone to Google, Facebook and Amazon, and the Covid-19 pandemic has only accelerated this trend. These companies – known in the digital media industry as the ‘triopoly’ – increased their share of the US digital advertising market from 80% in 2019 to a range approaching 90% in 2020, according to an analysis by the ad agency GroupM.
Alliances between publishers have already been attempted and have not generated the scale necessary to slow the accelerated growth of the triopoly. Pangea, a consortium that aimed to give publishers an extra scale in digital advertising, closed its doors last year, citing the impacts of the pandemic.
BuzzFeed has come a long way to become a public company after facing forces that have plagued all digital media, including an unreliable advertising market, competition from powerful rivals, and investor skepticism.
BuzzFeed was flying high in 2015. After a $ 200 million investment from NBCUniversal from Comcast Corp. which valued the startup at $ 1.5 billion, BuzzFeed stepped up its investments in film, television and news. Executives from traditional media companies including NBCUniversal, Discovery Inc.
and Time Warner predicted a decline in viewership and hoped their investments in digital media would help them attract new audiences.
But since then, the biggest media companies have largely focused on streaming video. Discovery, NBCUniversal, and ViacomCBS Inc. have all focused on developing their own streaming services, prioritizing subscriber growth over new investments in new media companies.
In 2017, BuzzFeed missed its revenue targets of around $ 350 million by around 15-20% and laid off around 100 employees in ad sales and business operations. The company’s finances have improved over the years as Mr. Peretti reduced his expenses and explored new sources of income. In 2020, BuzzFeed made a profit for the first time since 2014, the Wall Street Journal reported, in part by cutting spending by around $ 30 million.
BuzzFeed has already started to consolidate its competitors. In November, the company announced it was buying HuffPost from Verizon Communications Inc.
in a stock market transaction for an undisclosed amount. Earlier this month, BuzzFeed News won the Pulitzer Prize for International Reporting for articles revealing the Chinese government’s efforts to detain Muslims.
Write to Benjamin Mullin at [email protected]
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