Key Takeaways:
- Byron Allen takes control of BuzzFeed and HuffPost for $120 million ($20M cash, $100M note).
- Jonah Peretti steps down as CEO to lead the new BuzzFeed AI division.
- The company will spin off Tasty and BuzzFeed Studios to focus on chasing YouTube.
Media entrepreneur Byron Allen will acquire a 52 percent stake in BuzzFeed for $120 million and assume the chief executive role from founder Jonah Peretti as the company struggles with declining advertising revenue and mounting losses.
The agreement, announced Tuesday, includes $20 million in cash and a $100 million promissory note due five years after the deal closes, which is expected later this month. BuzzFeed reported a nearly 20 percent year-over-year decline in advertising revenue and a quarterly net loss of $15.1 million, compared with $12.5 million a year earlier.
BuzzFeed Restructures Amid Financial Pressure
The sale marks a sharp decline for BuzzFeed, once considered a dominant force in digital media. At its peak, the company reportedly rejected a $650 million acquisition offer from The Walt Disney Company during the height of its popularity in the social media publishing boom.
BuzzFeed rose alongside other millennial-focused digital outlets, including Vice Media and Mashable, by distributing viral content through platforms such as Facebook and Twitter. The strategy weakened as social media companies shifted toward keeping users on their own apps through algorithm-driven video feeds.
The company went public in 2021 and later acquired HuffPost from Verizon. However, its stock struggled on the Nasdaq, and BuzzFeed shut down BuzzFeed News in 2023 after years of financial pressure.
BuzzFeed’s flagship website drew about 33 million unique visitors in April, according to Comscore, trailing larger media brands such as USA Today and People.
Allen Expands Media Empire With Digital Push
Byron Allen, founder of Allen Media Group, has built a media portfolio that includes television stations, syndicated programs, and ownership stakes in broadcast assets. His acquisitions have included the linear television business of The Weather Channel in 2018.
More recently, Allen secured the late-night time slot previously occupied by The Late Show with Stephen Colbert and replaced it with his syndicated program, Comics Unleashed.
Byron Allen said the acquisition will position BuzzFeed and HuffPost for expansion into streaming and creator-driven content.
“BuzzFeed and HuffPost have become two iconic global digital media brands with powerful audience reach and strong cultural importance,” Allen said in a statement. “Our vision is to build on the iconic foundation of BuzzFeed and HuffPost by expanding into free-streaming video, audio, and user-generated content.”
Allen added that the company intends to compete in the digital video market. “With the power of AI, BuzzFeed is officially chasing YouTube to become another premier free video streaming service,” he said.
Peretti Shifts Focus Toward AI Development
Peretti will step away from the CEO role and oversee a new division called BuzzFeed AI, which will focus on developing products tied to advances in artificial intelligence.
“Byron’s vision, operational experience, and long-term commitment to premium content make him exceptionally well-positioned to lead BuzzFeed and HuffPost into our next phase of growth,” Peretti said.
BuzzFeed also plans additional cost-cutting measures and will spin off its studios division and food brand Tasty into a separate entity, signaling a possible future sale of those assets.
The restructuring comes as digital publishers continue adapting to changes in audience behavior dominated by short-form video platforms such as TikTok and Instagram.
Visit Visionary CIOs Magazine for the latest information.
