With the deal, Verizon secures a minority share in BuzzFeed as the two parties decided to leverage each others market strengths and create new revenue opportunities.
On Thursday, November 19, online news and lifestyle website BuzzFeed acquired HuffPost from Verizon Media, reported Wall Street Journal. The publication also noted that acquisition happens through a stock deal between the two parties. The terms of the deal state that Verizon Media will be the minority shareholder in BuzzFeed.
Besides, as part of the broader partnership, the two companies will also syndicate each other’s content. BuzzFeed will also use Verizon’s advertising platform to tap more customers. BuzzFeed CEO Jonah Peretti shall be leading the combined business. Interestingly, Peretti was the original co-founder of HuffPost in 2005, then named The Huffington Post. In an internal memo accessed by CNN, Peretti wrote:
“I still vividly remember the night we launched HuffPost and the excitement of growing it into a major news outlet during those early years. But we aren’t buying HuffPost because of its illustrious past or my personal connection; we pursued this opportunity because we are excited about the future of HuffPost and all the potential it has to continue to define the media landscape for years to come”.
Although Peretti will continue his role as a CEO, HuffPost will continue to function as an individual brand. However, BuzzFeed has already started the hunt for a new editor-in-chief for HuffPost. The new editor-in-chief for HuffPost will be reporting to Mark Schoofs, the existing editor-in-chief for BuzzFeed. In a separate email to the staff, Schoof wrote:
“I will weigh in on major strategy decisions, but I will not be involved in or focused on daily editorial decisions at HuffPost. I will also provide one point of contact to the company’s leadership for its news divisions. But my primary job is and will remain leading BuzzFeed News.”
BuzzFeed Diversifying & Restructuring the Business
With diverse revenue streams and a strong balance sheet, BuzzFeed is looking for more acquisitions in media and commerce. This is one of the biggest acquisitions by a digital media company to extend its share in the online advertising space. Besides, the New York-based BuzzFeed is also looking to diversify in new lines of business including cookware.
With the COVID-19 pandemic striking the world, BuzzFeed had its own shares of ups and downs. This involved some layoffs and pay cuts. However, it is back on a strong financial footing and will restore payments to employees who took a pay cut in April. This deal is also a win-win for Verizon who has been trying to actively unload HuffPost over the last year. On Thursday, Verizon Media CEO Guru Gowrappan said:
“Verizon Media’s strategy has evolved over the past two years to focus on our core strengths-ads, commerce, content and subscriptions. We’ve created a powerhouse ecosystem, built on a trusted network, that delivers an end-to-end experience for consumers and advertisers. The partnership with BuzzFeed complements our roadmap while also accelerating our transformation and growth.”
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