BuzzFeed misses revenue predictions as editor-in-chief quits

BuzzFeed has missed the lofty income predictions it pitched to Spac fund buyers final 12 months by greater than 20 per cent, whereas the digital media group’s editor-in-chief has resigned because it seems to be to additional shrink its newsroom.

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

Particular goal acquisition car 890 Fifth Avenue Companions raised $288mn forward of its merger with BuzzFeed, however these buyers 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 12 months — these of digital media firms HuffPost and Advanced 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, instructed workers on Tuesday morning he was leaving the corporate, and that BuzzFeed would supply voluntary redundancies to “speed up the timeline to profitability”.

“That can require BuzzFeed Information to as soon as once more shrink in measurement,” Schoofs mentioned in an inner memo, including that there can be a “shift in editorial focus and construction”.

BuzzFeed, recognized for its shareable listicles, quizzes and stunt movies, is one in every of a era of digital media teams that skilled a shocking rise and fall over the previous decade. Buyers 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 govt Jonah Peretti final 12 months instructed the FT that he was centered on “monetary self-discipline” as he got down to show that BuzzFeed might meet its monetary forecasts and develop right into a sustainable, worthwhile firm. “We’re initially of this subsequent stage of appreciation of valuations”, he predicted in July.

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

The group reported internet earnings of $26mn for 2021, though this revenue was attributable to a tax profit. Excluding this, BuzzFeed posted a internet lack of $528,000 for the 12 months.

Peretti mentioned: “We’re assured in our skill to guide the business ahead as we execute in opposition to our long-term progress plans.”

The corporate has beforehand fallen in need of its forecasts, lacking income targets in 2015 and 2017.

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

Nonetheless this enterprise posted income of $17mn within the fourth quarter, down 26 per cent from a 12 months in the past. Promoting was a vivid spot, rising 24 per cent from a 12 months in the past to $69mn.