There was a time, not so very long ago, when BuzzFeed quizzes traveled across Facebook feeds with the velocity of actual news, when venture capitalists spoke of the company in tones usually reserved for sovereign wealth, and when Disney was reportedly willing to pay $650 million for the privilege of owning it.
That time has passed.
On Monday, BuzzFeed announced that Byron Allen's media company would acquire a controlling 52 percent stake for $120 million — $20 million at closing and the rest spread over five years. For a publisher that warned investors in March it might not survive as a going concern, and that has been postponing a $5 million debt payment the way one might postpone a difficult conversation, the deal represents something between a rescue and a repurposing.
It also represents a rather dramatic repricing. BuzzFeed went public at a valuation of roughly $1.5 billion. Its market capitalization has since settled around $30 million. (Math was never the strong suit of the viral content era, but even so.)
The company was founded in 2006 by Jonah Peretti, who understood earlier than most that Facebook's algorithm would reward a certain kind of content — quizzes, listicles, short videos engineered for sharing — and built a business around feeding it. Advertisers followed, eager to attach themselves to "native advertising," a phrase that briefly achieved the status of incantation on Madison Avenue.
The problem, as several analysts noted to Digiday, is that the algorithm eventually changed its appetite. Ad revenue fell from $205.8 million in 2021 to $91.7 million this year. Unique visitors dropped 69 percent over roughly the same period.
Mr. Allen, whose portfolio includes The Weather Channel and roughly two dozen television stations, will replace Mr. Peretti as chief executive. Mr. Peretti will oversee the company's artificial intelligence division — a transition that sounds, on paper, like a lateral move and feels, in practice, like something else.
"Byron is shrewd and also likes value deals," said Sam Thompson, a senior director at Progress Partners, an advisory firm. "If you look at his history of acquisitions, it's been orphaned companies that need new guidance and leadership."
BuzzFeed, it seems, has found a new home. Whether it will remember what it was built for is another question entirely.
Original story published in Digiday: "BuzzFeed’s $120m sale reflects digital media’s repricing", by Sara Guaglione