HuffPost and BuzzFeed have stuck a stock deal. Under the arrangement, the American news aggregator – HuffPost, owned by Verizon Media – will now become part of BuzzFeed, The Wall Street Journal reported on Thursday.
As part of this acquisition, Verizon Media, in return, will become a minority shareholder in BuzzFeed, with the two companies working together to complement each other and capture a more significant share of readers.
The main reason for this partnership is said to be that BuzzFeed may take advantage of HuffPost’s ad technology. On the other hand, HuffPost would benefit from BuzzFeed’s overall revenue generation and audience reachability.
The acquisition of HuffPost complements the road map they had paved for themselves whilst helping to accelerate their transformation and growth journey.
Under this pact, both companies will maintain independent identities and offices. The sole purpose is only to help and enhance one another’s readerships.
Jonah Peretti, the BuzzFeed founder and CEO of The Huffington Post, speaking about the deal, said: “We want HuffPost to be more HuffPosty, and BuzzFeed to be more BuzzFeedy — there’s not much audience overlap.”
The BuzzFeed Founder also continued to mention, “These are different audiences they serve. On the editorial side and the consumer side, we want to have a lot of independence and autonomy for HuffPost and for it to determine its own brand.”
Arianna Huffington, the HuffPost founder, tweeted:
Verizon Media has been part of a series of acquisitions in the past, the first partnership being in 2011 with AOL.
AOL acquired HuffPost for $315 million, but later on in 2015, Verizon bought AOL for a $4.4 billion deal. It was under this partnership that Verizon came to own HuffPost. However, under the pandemic situation, the American Aggregator struggled with its revenues, for which it needed support, and BuzzFeed was its perfect savior.
HuffPost and BuzzFeed, both media companies, have been in dire need of saviors to survive in the Digital Media industry as it has become highly competitive and crowded. They’ve struggled immensely with their rounds of layoffs over the past few years.
With digital media companies like Google already taking the most prominent ad revenue chunks from the publisher and social platforms like Twitter, Facebook, YouTube, and Twitch are continuing to take over, many media and news companies needed to pivot their strategy and figure out how to persuade readers to pay for the content or watch ads.
Verizon’s media strategy [also] evolved massively over the past two years, with the main focus being on their core strengths – ads, commerce, content, and subscriptions, said Verizon CEO Guru Gowrappan.
It is also expected that once the deal gets cleared – which is by the end of this year – BuzzFeed will have to arrange ways to cut costs. The company had been on track to turn a profit this year; however, HuffPost’s addition is speculated to add more costs starting next year.
The deal between the two companies also includes cash, not disclosed, to BuzzFeed, which would help the media company handle crises like layoffs, pay cuts, and managing budgets.
Last year Vox Media acquired the New York Magazine.