BuzzFeed misses revenue predictions as editor-in-chief quits

BuzzFeed has missed the lofty income predictions it pitched to Spac fund traders final yr by greater than 20 per cent, whereas the digital media group’s editor-in-chief has resigned because it appears to additional shrink its newsroom.

When it agreed final June to go public in a cope with a clean cheque firm, BuzzFeed advised potential traders its income would soar to $521mn in 2021, $654mn in 2022, and $1.1bn in 2024, pushed by what it referred to as “rapid scale and monetisation with a deep understanding of virality and social”. 

Special function acquisition automobile 890 Fifth Avenue Partners raised $288mn forward of its merger with BuzzFeed, however these traders pulled 94 per cent of their cash out earlier than the corporate went public in December.

Their warning was validated on Tuesday as BuzzFeed reported income for 2021 of solely $398mn in its maiden annual outcomes as a public firm.

This was up from $321mn for 2020, however was boosted by two acquisitions accomplished final yr — these of digital media firms HuffPost and Complex Networks. BuzzFeed declined to say how a lot further income was offered by these offers.

Mark Schoofs, editor-in-chief of BuzzFeed’s information division, advised workers on Tuesday morning he was leaving the corporate, and that BuzzFeed would provide voluntary redundancies to “accelerate the timeline to profitability”.

“That will require BuzzFeed News to once again shrink in size,” Schoofs mentioned in an inside memo, including that there could be a “shift in editorial focus and structure”.

Overall BuzzFeed introduced it could lay off about 1.7 per cent of its workers, along with the voluntary redundancies at its information division, the newest downsizing on the troubled firm.

Shares have been up 2.6 per cent in noon New York buying and selling.

BuzzFeed, recognized for its shareable listicles, quizzes and stunt movies, is certainly one of a technology of digital media teams that skilled a shocking rise and fall over the previous decade. Investors soured on these firms as a result of they didn’t match hype with monetary efficiency, leading to a interval of slashed valuations and lay-offs.

Founder and chief government Jonah Peretti final yr advised the FT that he was targeted on “financial discipline” as he got down to show that BuzzFeed may meet its monetary forecasts and develop right into a sustainable, worthwhile firm. “We’re at the start of this next stage of appreciation of valuations”, he predicted in July.

This has not panned out. Instead, BuzzFeed’s inventory value halved from an preliminary $10 a share when it listed on the Nasdaq in December, to under $5, giving it a valuation of round $660mn.

The group reported web earnings of $26mn for 2021, though this revenue was attributable to a tax profit. Excluding this, BuzzFeed posted a web lack of $528,000 for the yr.

Peretti mentioned: “We are confident in our ability to lead the industry forward as we execute against our long-term growth plans.”

The firm has beforehand fallen wanting its forecasts, lacking income targets in 2015 and 2017.

Peretti has touted the potential of BuzzFeed’s fast-growing commerce enterprise, by means of which it sells BuzzFeed-branded merchandise starting from spatulas to intercourse toys, and earns a fee for recommending different merchandise bought on-line.

However this enterprise posted income of $17mn within the fourth quarter, down 26 per cent from a yr in the past. Advertising was a vibrant spot, rising 24 per cent from a yr in the past to $69mn.

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