Buzzfeed tries to go public again
SCOTT SIMON, HOST:
BuzzFeed, the media company, started out with cute kittens, moved on to a Pulitzer Prize. Now it's headed into the stock market. And it's not the first time the company has tried to go public, and the path this time around has raised questions about the future of digital news. We're joined now by Ben Mullin, media reporter at The Wall Street Journal. Mr. Mullin, thanks so much for being with us.
BEN MULLIN: Thanks for having me, Scott.
SIMON: BuzzFeed tried to go public a few years ago. What happened, if you could remind us?
MULLIN: Yeah. Basically, there were a bunch of trends that were unfavorable to their underlying business, which then was primarily based on advertising. Over the last decade or so, there have been a lot of companies in the digital media space like Vice, BuzzFeed, Group Nine Media - big part of their business model was predicated on selling advertising. Companies like Alphabet Inc.'s Google and Facebook - they were sucking up more and more of that ad revenue every year. And so part of the problem was they were planning to go public. They had these aggressive projections for their revenue growth. But they were leaning into a business that was increasingly going to some of their competitors.
SIMON: To put the point on it, I gather they're - BuzzFeed's only going to be getting $16 million in contrast to the $1 billion for which Axel Springer, for example, bought Politico. How is this going to affect their ambitions for the future?
MULLIN: Well, BuzzFeed has these really aggressive growth targets. They're planning to grow their revenue by 25% every year for the next five years. And if they have less cash to spend on investing in new initiatives, new ventures, then it's going to be harder for them to hit those aggressive growth targets.
SIMON: Sixteen million dollars is not a lot of money. I mean, it's not even a second-rate second baseman on a major league team. So why the IPO now?
MULLIN: Well, I think they needed to go public for a few reasons, to basically raise money to do mergers and acquisitions. There are investors who have been in the company for a long time. I mean, BuzzFeed's been around for more than a decade now. So a lot of those early investors want an exit. They want a return on their money. And another thing that Jonah Peretti was able to secure as part of this public listing was control over the company. So now that BuzzFeed is a public company, he has secured control over it through these voting shares.
SIMON: Tell us about the role of Jonah Peretti, co-founder of BuzzFeed, chief executive, often referred to as a colorful character.
MULLIN: Yeah, he's this really interesting guy. He started as an engineering student. He was a teacher as well. And he basically went on to co-found Huffington Post. And then ultimately, he started BuzzFeed as kind of a side project while he was still at Huffington Post. And he was trying to tap into the bored-at-work network, people who are just sitting at their desks and are really bored and want to look at cute kittens. And that ended up growing into a multimillion-dollar media empire.
SIMON: Does what's happened - with this offering being for the vastly reduced price that they had anticipated and certainly what they had desired, does that suggest that the future of advertising-supported news and information might be limited?
MULLIN: Yeah. I think that the fact that BuzzFeed, in its presentation to investors, said that they were going to lean on a few different types of revenue - they were going to sell you pots and pans through their Tasty vertical, which is those delicious, like, hands and pans videos. They have advertising, obviously, a licensing revenue stream. So I think even BuzzFeed kind of knows that they're not going to become the company that they want to be unless they do more than advertising.
SIMON: Ben Mullin is media reporter of The Wall Street Journal. Thanks so much for being with us.
MULLIN: Thank you, Scott.
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