It’s finally happened. Buzzfeed News is shutting down. In an internal memo sent to employees this afternoon, Buzzfeed CEO Jonah Peretti confirmed the flailing news site has run out of road, with 15% of the broader Buzzfeed workforce laid off. Some journalists will be kept on at HuffPost – for now. Peretti adds that he “overinvested” in Buzzfeed News and didn’t “hold the company to higher standards for profitability“. Peretti could have figured this out sooner if he’d just read Guido for the last five years…
Peretti said:
“While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization.”
Guido is looking forward to Media Guardian’s take on this, given they reliably informed Guido that Buzzfeed had plenty of cash. Lessons for PoliticsJoe…
Read the full, incredibly long memo below:
Yesterday the stock dropped 40%, which means it has lost more than 80% of its investors’ money this year, on top of the billions it has suckered out of investors over the last decade. The drop prompted Guido to take another look at the UK subsidiary’s recently filed accounts. It is grim reading…
Staff numbers were down 55 – from 194 to 139 – though pay was only down £11.2 million to £9 million, suggesting average pay costs rose to £64,748 per head. Turnover is down some 30%, from £18,855,900 to £12,647,506, on which they managed to lose £4,110,818; taking their rolled up losses to £27,438,282. A decade of value destruction through cat GIFs…
Before it IPO’d last year BuzzFeed told potential investors revenue in 2021 would reach $521 million and $1.1 billion by 2024, as a result of their “rapid scale and monetisation with a deep understanding of virality and social”. 2021 revenue actually came in at just $398 million in its first annual results as a public company. The combination of Buzzfeed with HuffPost and Complex Networks missed its promised revenue target by $123 million.
Mark Schoofs, editor-in-chief of BuzzFeed’s news division, is leaving the company, as are two other news editors, ahead of the firm offering voluntary redundancies to “accelerate the timeline to profitability … That will require BuzzFeed News to once again shrink in size”. Schoofs said in an internal memo that there would be a “shift in editorial focus and structure”. The fact is, he admitted, “The company has subsidized BuzzFeed News for many years”. News just doesn’t have the same appeal as Buzzfeed’s youth-focused woke popular culture content.
Buzzfeed also had a credibility problem trying to do serious news. Titles that run articles about pizzas that look like labias can of course do serious news, consumers however got confused as to the woke news brand’s values. Advertisers too want clear categories. Latterly Buzzfeed News was trying a Guardian-style begging model to pay its way. That clearly isn’t working… BuzzFeed posted a net loss of $528,000 for the year.
UPDATE: CNBC reports
BuzzFeed is shrinking its money-losing news organization, the company announced Tuesday, amid what people familiar with the matter describe as broader investor concern that the division is weighing down the company.
Several large shareholders have urged BuzzFeed CEO Jonah Peretti to shut down the entire news operation, said the people, who asked not to be named because the discussions were private. BuzzFeed declined to comment.
BuzzFeed News, which is part of its content division, has about 100 employees and loses roughly $10 million a year, two of the people said.
See also: Why BuzzFeed Doesn’t Make Money
Politico has been sold for $1 Billion to Axel-Springer, the German publisher of Bild – the Sun-like German tabloid – and Die Welt, among other titles. The firm had a reputation during the twentieth-century Cold War as staunchly anti-communist and pro-American editorially. To this day the titles maintains a centre-right editorial line…
Only 15-years old, Politico has established an authoritative reputation for reporting politics seriously, originally with hacks spun out of the Washington Post, it expanded from DC to Brussels and London with more than 500 journalists. Politico generates significant revenues from specialist business-to-business subscriptions and advertising on its flagship “Playbook” morning emails.
Axel-Springer have been joint venture partners with Politico since 2014 when they launched Politico Europe. The Brussels-based division has been profitable since 2019 according to Politico sources. The sale will encourage prospective investors in Buzzfeed’s SPAC plan, though Buzzfeed is a more troubled venture despite having absorbed the Huffington Post. The market for profitable digital media ventures is strong…
Buzzfeed UK’s 2020 results are out today; the group’s turnover was £18.9 million for the year, a decrease of 16% from £22.4 million in 2019. They blame “continued economic and political uncertainty” for the losses. They claim operating losses were reduced from £7.4 million in 2019 to £2.9 million in 2020 after the divestment of international entities part way through the year. Mean average compensation for the 194 remaining staff fell from £76,673 to £66,238. They also fired more journalists and got out of the serious news business.
Operating losses may have been reported as reduced to £2.9 million, though the stated total comprehensive loss for the year is reported as £4,193,125. By Guido’s calculations Buzzfeed Uk has burnt through some £24 million of investor’s cash in the 8 years it has graced our shores. Guido has said it before and he will say it again, at what point – having never made a profit in the UK – does the parent BuzzHuff US company decide to get out of the vanity publishing business?
See also: Why BuzzFeed Doesn’t Make Money
Last month the left-leaning news site Huffington Post was taken over by Buzzfeed, another woke, money losing news website. It has immediately gone about cutting staff and closing divisions worldwide. Guido is told that the London news desk is to close and the operation is to be slimmed down to focus on politics, entertainment and lifestyle. Job losses have not yet been officially announced…
Between them the two left-leaning news sites famous for listicles and side-boob stories have lost investors over a billion dollars since launching. The trash-traffic site’s CEO, Jonah Peretti, is determined to keep in the expensive business of political reporting, despite stiff opposition on both sides of the Atlantic from Politico as well as the traditional news brands of broadcasters and newspapers. Good luck, you’ll need it…
