BuzzFeed is listed on NASDAQ. How to do?

The transition from a start-up company to a listed company should be a very big thing.

So let us first admit that BuzzFeed, which started as an internet experiment 15 years ago, has reached a milestone: December 6th is the day when you can buy and sell BZFD stock on NASDAQ.

We can also admit that the transformation of BuzzFeed is much more difficult than expected.Last week, when it officially changed from a private company to a public company (using A “SPAC”-a financial project that was very popular a year ago And has now fallen out of favor), investors sneered at the company. This means that it only raised $16 million instead of the $250 million it hoped to raise earlier this year. Most importantly, 61 employees in the BuzzFeed News business (approximately 5% of the company’s total employees) left their jobs last Thursday to protest their negotiations on a union contract.

But step back a bit. The fact that BuzzFeed exists—not to mention public trading, and all the financial transparency and investor expectations that come with it—is worth noting.

BuzzFeed may be the most famous member of a series of digital publishers launched in the past decade, and for a while it seemed that they might usurp traditional media companies.Their rise frightened existing publishers and briefly persuaded investors to give up Billions of dollars Their way.

Then, their main strategy-locking in Facebook and profiting when social networks put their stuff in front of countless eyeballs-collapsed about four years ago, when Facebook’s competitors were more obvious than partners.And then many of them Zoom out Dramatic or Disappeared common.

So the fact is BuzzFeed still exists and is big enough to exist as a public company, Is…something.

It’s not as fascinating as it was six or seven years ago, when the existence of BuzzFeed — and other publishers such as the Huffington Post and my employer Vox Media — made The New York Times worry enough that the newspaper created a What internal report do we do now Committed to defending against the insurgents. Or when BuzzFeed seemed to have such a deep insight into digital culture that Ben Smith, the editor-in-chief at the time, could boast “The world has come to us. “Or when it tells the world that it will use what it has learned to make viral content Use these insights to disrupt Hollywood.

In the blink of an eye, BuzzFeed’s ambitions have been greatly reduced: like everyone else in the media, it is trying to sell projects to studios and streamers that need content. But the idea of ​​the BuzzFeed Motion Pictures department seems a bit far-fetched. This seems to be why the company no longer has a department called thatIt turns out that the New York Times doesn’t really need to replicate the viral content strategy that BuzzFeed helped create.Instead, it generates excellent news and Require readers to pay for it, They seem to be happy to do so. It has been able to use the money to hire celebrities from digital competitors such as Vox and BuzzFeed.Include Ben Smith.

To be more specific: As of last week, BuzzFeed is valued at $1.5 billion-less than $1.7 billion investors think it’s worth the money in 2016, Although it has since acquired two large publishers, HuffPost and Complex.

Or, another, more practical way to emphasize BuzzFeed’s strict expectations: Over the years, BuzzFeed CEO Jonah Peretti (Jonah Peretti) stated that his BuzzFeed news department is losing money, Because it did important work that he was happy to fund. But this situation has changed in recent years. In 2019, BuzzFeed makes massive layoffs in this group for the first time, And now Peretti says he wants BuzzFeed News to reduce its losses. Therefore, contract negotiations have been going on for more than two years.

“I’m still very comfortable [with BuzzFeed News losing money]. To a point. But this is different from the past,” Peretti told me in an interview on Friday. Recode media podcast. “So I think people have the expectation that what we have done in the past with large news subsidies, we will continue to do at the same level. We can do this. But we must ensure that we build a sustainable, A profitable and growing business so that we can engage in journalism in the next few years and have such an important impact.” You can listen to the entire interview At this link, Or below.

But even a downsized version of BuzzFeed is a good thing, because we need more publishers, not fewer-although the ultimate goal of Peretti’s listing is to integrate other digital publishers under BuzzFeed. More choices are better for you. You are the people who want the media to help them understand the world around you. This is also good for existing publishers, who can use regular competitive kicks.Provide publishers not relying on having an international subscriber base of 10 million or kindness Billionaire supporter.

This is the big picture. Now let’s zoom in and talk about what public BuzzFeed means for different constituencies:

For those who work at BuzzFeed:

Some of them will make money. BuzzFeed’s issuance means that their shares or options in this former private company can now be traded on the open market. For example, Peretti’s shares in the company he founded will be worth millions of dollars.

Some low-level employees who received options after BuzzFeed’s last round of financing in 2016 may not see any benefit for the time being: public investors must first decide that the company is worth at least $1.7 billion before these financial instruments have any value. At the same time, some former employees—especially those who arrived early—may have some cash, but not a windfall: “This won’t be a down payment for the house, but maybe it will make the house fresh,” one A former BuzzFeed editor told me.

For those who manage BuzzFeed:

Peretti has said for years that he wants digital publishers to integrate. In theory, the fact that BuzzFeed is public makes it easier for him to integrate them, because he can sell shares in the company to public investors or find other ways to obtain funding. The transaction that made BuzzFeed go public has already begun the process by offering them cash to acquire Complex, a lifestyle publisher known for hip-hop culture stories and conferences, and a video series about celebrities, Hot Ones, who ate very spicy chicken wings. But BuzzFeed’s ability to acquire other companies will depend on its performance as a public company, so Peretti’s plan is largely to be determined.

For people who manage publishers not named BuzzFeed:

Privately, digital publishers that compete with BuzzFeed like to complain about BuzzFeed: They think Peretti is constantly shifting from one story to another when describing BuzzFeed’s strategy and tactics. Latest news: It will make a lot of money from “commercial”, which currently mainly means adding affiliate links to the story (the same is true for Vox Media). In public, they wish him all the best. But they all know that their story is also a BuzzFeed story: if it is done well, maybe they can too.

“Whether it’s right or wrong, fair or unfair, all digital media companies will be severely hampered by BuzzFeed,” said Bryan Goldberg, CEO of Bustle Digital Group, who also wants to go public. “The fate of BuzzFeed will determine the fate of many other companies.”

This does not mean that BuzzFeed’s stock performance today will determine whether companies such as Goldberg or Vox Media will be listed in the near future. However, if in the next year or so, public investors determine that they are not interested in BuzzFeed, it will make it more difficult for Goldberg to express their opinions around the world. This is why the listing of BuzzFeed can be a very important thing at the same time and is not important at all. We will not know the real answer for some time.

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