7 ms·

BuzzFeed to go public, after shareholders approve SPAC deal

36 points by nojito 5y ago

ArtTimeInvestor 5y ago
This announcement made me check out BuzzFeed for the first time. How do other people get there? From what I can see, the business model is to have a flood of cheaply written content (My guess would be the average article costs them like $10 to produce?) and then monetize visitors via ads?
- dtech 5y ago
  Visitors mainly come social media sites or other aggregation sites and Google. Your analysis about their model is right. They even are mentioned in the top Urban Dictionary definition of clickbait [1] [1] https://www.urbandictionary.com/define.php?term=clickbait https://www.urbandictionary.com/define.php?term=clickbait
fnord77 5y ago
the final coffin nail for SPACs?
- A4ET8a8uTh0 5y ago
  If anything, it seems like SPACs are the new IPOs. Everyone wants one.
  - IAmGraydon 5y ago
    They aren’t new. They’ve been around since the 1990s. There has definitely been a resurgence though, fueled by retail traders looking for volatile and highly levered equities.
- wtf_is_up 5y ago
  No - just like the previous dozens of times comments like this have been posted.
beervirus 5y ago
> Details: BuzzFeed said in an SEC filing following the vote, “the transaction is expected to raise at least $166.2 million," with about $150 million coming from convertible debt financing and $16.2 million from investor cash. >That $16.2 million of investor cash is 94% less than the $287.5 million the SPAC raised in its IPO in January. Big oof. The SPAC investors hate the deal and mostly pulled their money out of it.
- dmurray 5y ago
  This is pretty standard these days, right? The people who invest in SPACs aren't actually interested in owning the target company medium-term. But someone else is willing to put up the money, so that's fine. SPACs are not currently primarily a vehicle for raising capital, they're an alternative method for companies to go public. They have different (generally lower) regulatory requirements than an IPO, and different (probably about the same) costs in fees to the company.
  - beervirus 5y ago
    Plenty of SPACs announce a merger and the stock price goes up. You don’t see much/any redemption in a case like that—why redeem a share for $10 when I can just sell it for $30?
sodality2 5y ago
Before the negative comments for Buzzfeed come in, please check out their investigations: https://www.buzzfeednews.com/investigations https://www.buzzfeednews.com/investigations These are hard-hitting, actual journalist investigations that is absolutely on a different level than their regular content on the main site. It seems the ad revenue from the Bad Buzzfeed funds their investigative journalism. Edit: Yes, even BuzzfeedNews.com is sort of bad - it's a mix. Below article linked from throwaway894345 is an example of a bad one but a lot of the articles on the main page seem to be legitimate news (if not as detailed as their investigations unit).
- JohnWhigham 5y ago
  And when ad revenue dries up, the first thing to be shuttered will be that.
  - sodality2 5y ago
    Yeah, it's pretty unfortunate but I've got mixed feelings as clearly the model is not terrible, and they're still funding investigative journalism.
- throwaway894345 5y ago
  I remember Buzzfeed News stoking up drama whenever they could, but maybe they’ve turned a corner since I stopped paying them attention. https://www.buzzfeednews.com/article/davidmack/first-they-came-for-our-venti-frappuccinos https://www.buzzfeednews.com/article/davidmack/first-they-ca... > PEOPLE ARE MAD. FURIOUS.
  - sodality2 5y ago
    Yeah, if an article has single sentences of bold text between tweets or images, it's a Bad Buzzfeed article. That's definitely a prime example of crappy journalism. There's so many reasons why it's not good but when you realize it's marketed to 14-26 year olds, it makes a bit more sense.
- 1123581321 5y ago
marban 5y ago
BF ≠ BF News — Keep that in mind before the usual bashing.
- errcorrectcode 5y ago
  The problem is branding. They should've changed their name or they get all they deserve.
- RankingMember 5y ago
  Impossible to ignore that the parent is the same. If the root of a poisonous plant grows a few non-poisonous fruit, I'd still be staying away from the whole plant as a matter of course.
- thenanyu 5y ago
  This meme needs to die. BF doesn’t get to respectability-wash their garbage by hiring some former NYT employees.
deleted 5y ago
[deleted]
BitwiseFool 5y ago
I believe the fundamental problem with BuzzFeed is that it is built on a foundation of clickbait. Does clickbait work? Absolutely, but only for a while before people adapt to it. The reason is that clickbait is inherently disappointing. Truly interesting content does not need to be fluffed up, while most content on BuzzFeed is made to look more intriguing than it actually is. I believe they are conditioning their users to be interested and then let-down after each article, listicle, video, piece of content, etc. They seem to be doing well in the short term, but I do not think their business model / hotness will last into the future.
- errcorrectcode 5y ago
  Their business model should just shift to a 100% chumboxes model of clickbait. It would be more honest.
  - BitwiseFool 5y ago
    If they merged with Taboola and Outbrain, they could become a titan of worthless online muck!
    - rvnx 5y ago
      I would invest into it, as I guess their profitability will increase further as they won't even need to hire writers in the future, thanks to GPT-3.
- donbrae 5y ago
  Is BuzzFeed actually clickbait, though? If you mean that the headline makes you want to click to read the article, then I guess it is. But that’s no different to any website. Looking at the home page just now, BuzzFeed doesn’t seem to make outlandish claims or promises in the headline or accompanying image that aren’t then delivered in the article. It’s all pretty silly, of course, but the content seems to match the headline in the items I clicked on. This makes sense if the goal is to get folk sharing BuzzFeed content on social media: if the content was a letdown, it wouldn’t be shared. I seem to remember Ben Thompson talking about this common misconception on his podcast years ago.
errcorrectcode 5y ago
BuzzFeed can die a horrible death for all I care. Their rep is forever one below Maury Povich. That decent shops like TruthDig went under because of arrogant owners/investors while TD lives is a travesty.
iso1631 5y ago
You wouldn't BELIEVE what company is going public
siruncledrew 5y ago
Buzzfeed reminds me of fast food, where there’s a few specials of options for show like “Look we have a salad! Look healthy!” but 98% of everything else produced is crap made as cheap as possible to sell it at volume. Buzzfeed’s money maker is “fast-news, volume-articles”, and I expect investors to double down on that. They are not going to be ok with producing 6 high quality articles a month that take a ton of time to produce with a short window of monetizing when they could just pump out 1000 crappy articles a month and use those as hooks to siphon ad revenue from.
gumby 5y ago
I think they ended up raising $16MM rather than the $250MM they had planned on.
barbazoo 5y ago
I'm genuinely wondering what the motivation is of a company like BuzzFeed to go public. As far as I understand, going public is often done to raise capital to do expensive things you wouldn't otherwise be able to afford like R&D, innovation, infrastructure, etc. I can't see how that's necessary for a "newsroom" kind of operation that doesn't have or produce much tangible.
- Kye 5y ago
  Possibilities: cashing out before the music stops, regulatory requirement to go public, hope that an IPO pop could save a sinking ship.
cultofmetatron 5y ago
Buzz feed can die a slow agonizing death after all their "manspreading" bullshit. Its largely a jobs program for ideological extreme leftist nutjobs. The worst part is it gives conservative outlets a tangible strawman to make their own toxic bullshit seem more nuanced than it is to their conservative base. In the end we the people lose out.

36 points by nojito 5y ago

This announcement made me check out BuzzFeed for the first time. How do other people get there? From what I can see, the business model is to have a flood of cheaply written content (My guess would be the average article costs them like $10 to produce?) and then monetize visitors via ads?

dtech 5y ago
Visitors mainly come social media sites or other aggregation sites and Google. Your analysis about their model is right. They even are mentioned in the top Urban Dictionary definition of clickbait [1] [1] https://www.urbandictionary.com/define.php?term=clickbait https://www.urbandictionary.com/define.php?term=clickbait

fnord77 5y ago

the final coffin nail for SPACs?

A4ET8a8uTh0 5y ago
If anything, it seems like SPACs are the new IPOs. Everyone wants one.
- IAmGraydon 5y ago
  They aren’t new. They’ve been around since the 1990s. There has definitely been a resurgence though, fueled by retail traders looking for volatile and highly levered equities.
wtf_is_up 5y ago
No - just like the previous dozens of times comments like this have been posted.

beervirus 5y ago

> Details: BuzzFeed said in an SEC filing following the vote, “the transaction is expected to raise at least $166.2 million," with about $150 million coming from convertible debt financing and $16.2 million from investor cash. >That $16.2 million of investor cash is 94% less than the $287.5 million the SPAC raised in its IPO in January. Big oof. The SPAC investors hate the deal and mostly pulled their money out of it.

dmurray 5y ago
This is pretty standard these days, right? The people who invest in SPACs aren't actually interested in owning the target company medium-term. But someone else is willing to put up the money, so that's fine. SPACs are not currently primarily a vehicle for raising capital, they're an alternative method for companies to go public. They have different (generally lower) regulatory requirements than an IPO, and different (probably about the same) costs in fees to the company.
- beervirus 5y ago
  Plenty of SPACs announce a merger and the stock price goes up. You don’t see much/any redemption in a case like that—why redeem a share for $10 when I can just sell it for $30?

sodality2 5y ago

Before the negative comments for Buzzfeed come in, please check out their investigations: https://www.buzzfeednews.com/investigations https://www.buzzfeednews.com/investigations These are hard-hitting, actual journalist investigations that is absolutely on a different level than their regular content on the main site. It seems the ad revenue from the Bad Buzzfeed funds their investigative journalism. Edit: Yes, even BuzzfeedNews.com is sort of bad - it's a mix. Below article linked from throwaway894345 is an example of a bad one but a lot of the articles on the main page seem to be legitimate news (if not as detailed as their investigations unit).

JohnWhigham 5y ago
And when ad revenue dries up, the first thing to be shuttered will be that.
- sodality2 5y ago
  Yeah, it's pretty unfortunate but I've got mixed feelings as clearly the model is not terrible, and they're still funding investigative journalism.
throwaway894345 5y ago
I remember Buzzfeed News stoking up drama whenever they could, but maybe they’ve turned a corner since I stopped paying them attention. https://www.buzzfeednews.com/article/davidmack/first-they-came-for-our-venti-frappuccinos https://www.buzzfeednews.com/article/davidmack/first-they-ca... > PEOPLE ARE MAD. FURIOUS.
- sodality2 5y ago
  Yeah, if an article has single sentences of bold text between tweets or images, it's a Bad Buzzfeed article. That's definitely a prime example of crappy journalism. There's so many reasons why it's not good but when you realize it's marketed to 14-26 year olds, it makes a bit more sense.
1123581321 5y ago

marban 5y ago

BF ≠ BF News — Keep that in mind before the usual bashing.

errcorrectcode 5y ago
The problem is branding. They should've changed their name or they get all they deserve.
RankingMember 5y ago
Impossible to ignore that the parent is the same. If the root of a poisonous plant grows a few non-poisonous fruit, I'd still be staying away from the whole plant as a matter of course.
thenanyu 5y ago
This meme needs to die. BF doesn’t get to respectability-wash their garbage by hiring some former NYT employees.

deleted 5y ago

[deleted]

BitwiseFool 5y ago

I believe the fundamental problem with BuzzFeed is that it is built on a foundation of clickbait. Does clickbait work? Absolutely, but only for a while before people adapt to it. The reason is that clickbait is inherently disappointing. Truly interesting content does not need to be fluffed up, while most content on BuzzFeed is made to look more intriguing than it actually is. I believe they are conditioning their users to be interested and then let-down after each article, listicle, video, piece of content, etc. They seem to be doing well in the short term, but I do not think their business model / hotness will last into the future.

errcorrectcode 5y ago
Their business model should just shift to a 100% chumboxes model of clickbait. It would be more honest.
- BitwiseFool 5y ago
  If they merged with Taboola and Outbrain, they could become a titan of worthless online muck!
  - rvnx 5y ago
    I would invest into it, as I guess their profitability will increase further as they won't even need to hire writers in the future, thanks to GPT-3.
donbrae 5y ago
Is BuzzFeed actually clickbait, though? If you mean that the headline makes you want to click to read the article, then I guess it is. But that’s no different to any website. Looking at the home page just now, BuzzFeed doesn’t seem to make outlandish claims or promises in the headline or accompanying image that aren’t then delivered in the article. It’s all pretty silly, of course, but the content seems to match the headline in the items I clicked on. This makes sense if the goal is to get folk sharing BuzzFeed content on social media: if the content was a letdown, it wouldn’t be shared. I seem to remember Ben Thompson talking about this common misconception on his podcast years ago.

errcorrectcode 5y ago

BuzzFeed can die a horrible death for all I care. Their rep is forever one below Maury Povich. That decent shops like TruthDig went under because of arrogant owners/investors while TD lives is a travesty.

iso1631 5y ago

You wouldn't BELIEVE what company is going public

siruncledrew 5y ago

Buzzfeed reminds me of fast food, where there’s a few specials of options for show like “Look we have a salad! Look healthy!” but 98% of everything else produced is crap made as cheap as possible to sell it at volume. Buzzfeed’s money maker is “fast-news, volume-articles”, and I expect investors to double down on that. They are not going to be ok with producing 6 high quality articles a month that take a ton of time to produce with a short window of monetizing when they could just pump out 1000 crappy articles a month and use those as hooks to siphon ad revenue from.

gumby 5y ago

I think they ended up raising $16MM rather than the $250MM they had planned on.

barbazoo 5y ago

I'm genuinely wondering what the motivation is of a company like BuzzFeed to go public. As far as I understand, going public is often done to raise capital to do expensive things you wouldn't otherwise be able to afford like R&D, innovation, infrastructure, etc. I can't see how that's necessary for a "newsroom" kind of operation that doesn't have or produce much tangible.

Kye 5y ago
Possibilities: cashing out before the music stops, regulatory requirement to go public, hope that an IPO pop could save a sinking ship.

cultofmetatron 5y ago

Buzz feed can die a slow agonizing death after all their "manspreading" bullshit. Its largely a jobs program for ideological extreme leftist nutjobs. The worst part is it gives conservative outlets a tangible strawman to make their own toxic bullshit seem more nuanced than it is to their conservative base. In the end we the people lose out.