Digital news and lifestyle platform BuzzFeed has swallowed up the HuffPost news aggregator and blog for an undisclosed price to create an online media colossus.
The all-share deal will enable both firms to streamline operations by sharing content and doubling up on joint advertising opportunities, and will boost BuzzFeed’s monthly audience reach by 29% to 103 million unique monthly visitors at a stroke according to ComScore.
Offloading HuffPost has been a long-held goal for Verizon and a double benefit of the disposal will be BuzzFeed’s membership of the Verizon ad platform.
What just happened?
Buzzfeed has wrested control of HuffPost in an undisclosed all-shares deal, with Verizon taking a small stake in the newly enlarged BuzzFeed.
The combined business will be led by BuzzFeed chief executive Jonah Peretti, who also happened to co-found the Huffington Post along with Arianna Huffington back in 2005.
HuffPost is likely to remain in use as a standalone brand alongside BuzzFeed subsidiary Tasty, but the possibility of job losses arising from duplicated roles has not been addressed.
What it means for BuzzFeed and Verizon
BuzzFeed was founded by Peretti and John S Johnson III in 2006 as a provider of ’listicles’ and quizzes popular with younger audiences, but the business has been in a dire state following the withdrawal of advertisers and affiliate programs amid the global pandemic.
Earlier this month, however, Peretti claimed BuzzFeed had turned a corner after posting its first profit since 2014 in the third quarter, raising hopes that year-over-year revenue for 2020 will be flat or even ahead of last year.
BuzzFeed’s rollercoaster relationship with investors has seen it struggle to restore the glory days of 2015 when it was able to draw $200m investment from NBCUniversal, which valued the business at $1.5bn.
Similarly, HuffPost was acquired by Verizon Media in 2015 as part of a $4.4bn takeover of AOL and subsequently merged with Yahoo, only for their value to be written down by an eye wincing $5bn several years later.
In recent years, online advertising dollars have been monopolised by the likes of Facebook and Google, squeezing out smaller publishers such as BuzzFeed and HuffPost, which have been forced to retrench.
Bolstering its bottom line, BuzzFeed will gain access to Verizon Media Immersive, a cloud-based 5G-powered platform for advertising and content, under the terms of the deal.
BuzzFeed will also gain access to Verizon Media’s ad platform, opening up new opportunities to harness data and reach consumers across mobile, desktop, video, native, addressable TV, connected TV (CTV), digital out of home (DOOH) and audio.