BuzzFeed will acquire HuffPost as part of a larger stock deal with parent company Verizon Media the companies announced Thursday, becoming the latest digital media companies to merge in the hopes of better competing with Facebook and Google for advertising revenue.
BuzzFeed and Verizon Media will partner across advertising and content, including syndication and ecommerce, and they noted BuzzFeed and HuffPost share a similar readership demographic.
BuzzFeed founder and CEO Jonah Peretti will run the company after the merger.
Verizon Media will invest an undisclosed amount to become a minority shareholder in BuzzFeed.
BuzzFeed and HuffPost will run as distinct news organizations.
Verizon Media owns multiple digital publications, including Yahoo, TechCrunch and Engadget.
After years of strong growth in readership, both HuffPo and BuzzFeed have struggled to make money amid a decline in online advertising rates. Verizon in 2015 bought AOL owner HuffPo for about $4.4 billion and combined it with Yahoo, which it acquired in 2017 for $4.5 billion. In 2018 Verizon wrote down the value of its media assets by $4.6 billion to just $200 million, admitting revenue was lower than expected. During a staff call in October, Peretti reportedly said he expected BuzzFeed would break even this year, which hasn’t happened since 2014, according to the Wall Street Journal. Revenue is expected to be lower this year than last, people familiar with BuzzFeed’s finances told the Wall Street Journal. But they said BuzzFeed decreased costs by about $30 million through layoffs and furloughs, pay cuts and other changes.
The deal comes 15 years after Peretti founded what was then called The Huffington Post with Arianna Huffington and Kenneth Lerer.
There have been multiple mergers and acquisitions in online media in recent years as companies look to scale to counteract forbidding trends in online advertising. Last year, Vice acquired Refinery29, Group Nine purchased PopSugar and Vox bought New York Media. Refinery29 was reportedly acquired for $400 million, PopSugar for $300 million and the Vox deal valued New York Media at about $105 million, the Wall Street Journal reported citing people familiar with the deals.
BuzzFeed Expects to Break Even This Year, Thanks to Heavy Cost Cuts (Wall Street Journal)
Group Nine to Acquire PopSugar, Continuing Wave of Digital Media Tie-Ups (Wall Street Journal)
Verizon Takes $4.5 Billion Charge Related to Digital Media Business (Wall Street Journal)
— to www.forbes.com