BuzzFeed and HuffPost, previously separate, at the moment are one, as first reported by The Wall Street Journal. Verizon — which beforehand owned HuffPost, née The Huffington Submit — has dumped the powerhouse digital media model in an all-stock deal.
The pairing is sensible. Jonah Peretti, now CEO of BuzzFeed, was a co-founder of what was then known as The Huffington Submit. In reality, BuzzFeed, which began its life as an organization that abused younger individuals to “curate” viral content material for advert {dollars} and hoovered up tons of enterprise capital within the course of, was based by Peretti in his free time whereas he was working at The Huffington Submit. (The identify was modified in 2017 as a part of a company-wide rebranding led by former editor-in-chief Lydia Polgreen, who’s now head of content material at Gimlet.)
The extra fascinating factor is that Verizon has taken a minority stake in BuzzFeed, which is nice for BuzzFeed however a bit humorous. Aren’t they making an attempt to get out of the digital media enterprise? In any case, the merger does a few issues for these two firms. First, it provides them higher scale, which implies they will command extra advert {dollars} from a market that’s been eviscerated by Fb and Google. Second, it means the merged firm most likely gained’t go underneath anytime quickly.
Because the WSJ notes, BuzzFeed buying HuffPost — god, this capitalization — means the corporate is following the brand new media development: final yr, Vice, Vox, and Group 9 all acquired different digital media companies. Consolidation, child. It’s good for enterprise, although digital media is apparently dangerous enterprise.
Our union committee’s assertion on the information that BuzzFeed is buying HuffPost: “We’re glad we fought arduous for successor language in our contract and have protections of a union contract on this course of.”
— HuffPost Union (@HuffPostUnion) November 19, 2020
As we all know from the hit tv present Succession, execs would really like the digital media enterprise to usher in returns sufficiently big to please their traders, which, normally, just isn’t attainable. Simply final yr, HuffPost did a fantastic post-mortem on how Mic.com, a massively hyped digital media upstart backed by tens of hundreds of thousands in enterprise money, ended up bought to Bustle Digital Group for a paltry $5 million. In keeping with Bryan Goldberg, Bustle CEO and purchaser of distressed web sites, the company had a day of cash left in the bank when he bought it.
If this deal sounds acquainted, it’s as a result of what occurred to HuffPost is nearly precisely what occurred to Tumblr. Verizon purchased Yahoo for $4.6 billion in 2017, and it bought Tumblr as a part of the deal. After that, it merged AOL and Yahoo’s media divisions into one enormous failure known as, hilariously, Oath — which took a $4.6 billion writedown on in 2018, admitting defeat. Tumblr, in the meantime, was bought to Automattic, which owns WordPress, in 2019.
The media enterprise consolidates. That’s the rule.
