A highlight from Playbook of Jonah


The digital media start up buzzfeed has long been led by its cerebral ceo and founder jona peretti. Now peretti is preparing the company for a new era. It's planning to go public through ace back making buzzfeed. The first of its generation media companies to go public and the spac verger could include a twist as buzzfeed is also looking to buy media and entertainment company complex networks my colleagues jessica tinkle and sick. He'll patel pieces week on peretti's latest efforts to turn buzzfeed into a holding company for media brands. Hey guys hey hey corey. So let's first take a little bit of a step back on buzzfeed. This was once a high-flying digital media startup valued at one point. Seven billion in two thousand sixteen. It hasn't been easy to sustain that momentum. You both have followed this company for a while. How do you view the buzzfeed story. Are they a success story right now. Are they a disappointment. Where do you land jessica. I would say. I'm you know cautiously optimistic. A lot has to happen for them to be considered a success but given where they were a couple of years ago or even a year ago where a lot of people were saying. Where's buzzfeed in this. You saw a lot of their competitors you know just to take a step back jeopardy. The ceo of buzzfeed as you said he made this declaration that digital media companies need to come together the needs to be a roll up buzzfeed's in a good position to do that and we need to do that to be able to get better rates from the likes of facebook and google and then everyone else partnered up right vice bought refinery twenty nine new york magazine group nine bought a company called pop sugar and everyone was like what happened buzzfeed. They've they've been left out and so now it looks like they're making their move and if they do. All of this is the deals that have done whether it's buying huff po and or buying complex like they're interesting deals. They're not like huge. Splashy deals but i think that he's like quietly making his moves to position buzzfeed in put it in a good position. I would say. It's kind of reflective of broadly we're digital media is right now. There was a few years where you had all these companies getting high valuations. Were going to be these massive disruptive brands that we're going to change everything from traditional publishing television and it was going to usher in a new future but most of these companies were also almost entirely reliant on advertising and especially digital advertising and as we've seen a lot and also an increasing amount of advertising is going to the tech giant's facebook google amazon more recently it's not going to the media companies as much and so reality kind of set in maybe maybe some of these companies should not have had these massive valuations when their businesses were not actually that healthier sustainable at least at that point to support that right. So i think bus almost i want to call it the only one but it is definitely one of the poster. Children of what we've seen as digital media has kind of evolved over the past few years from sort of the peak to a more realistic place. Right now jessica you profiled him in the past among the people who know jona best. What's good for. How can we as readers and listeners. Understand journey peretti. I mean john is really known for his prognostic. Heating about the future of the business particularly the digital media business. I mean you know we note in the story that his happy place is like pouring over his computer looking at all the data figuring out what the trends are with. Why people are you know why certain things go viral. You know that's how buzzfeed came about was like they did the viral lists and the list of goals and so that's his happy place. I mean i would say the biggest criticism over jona of jona over the years has been that. He's focused on the macro and that he should have started focusing more on the details sooner in terms of making money profitability. You know he was running the company like a startup whereas the company was transitioning into needing to be more of a sustainable business and wasn't making money for a while they were profitable last year. So i think that has changed but that is kind of been the knock on jonah historically but he does seem to be that from reading your piece it seems like he is cobbling together an interesting strategy perhaps and at least with its going public it will have more cash on its balance sheet. And it's trying to do this. Acquisition of complex suhil. What's the rationale for doing this deal. And what would it do to buzzfeed as a business but it grow at significantly or not one thing. That complex has done out. Are you pretty decently effectively over the past few years is it's actually built a a diversified revenue portfolio that a lot of these media companies have been talking about especially in the last three or four years right. It goes from everything from but start with with commerce right Complex has had a business where it sells products directly or through retail to customers right To have the show called hot ones which pretty popular on youtube and that has led to a business where they're actually do hot sauce sales and getting a cut of the commerce revenue from that right the operate. This event called complex on where you have tens of thousands of people going to these massive convention centers. And you have all these brands whether it's like really cool watch brands or streetwear. Culture brands selling them stuff there. There's panels interviews things to buy. So they have built a legacy to a degree of being able to do different types of commerce. And that's very helpful for a company like buzzfeed which has publicly talked up how much they see commerce as their future and complex definitely helps accelerate those efforts for buzzfeed right. That makes sense. You need a bunch of buckets of revenue. I think. I've heard jonah say that before. Wouldn't one deal. He did pull off. Was being able to wrangle huff. Po from verizon and you detail in your story this week just how he was able to do that you know. It seems like he was essentially able to take advantage of a telco that didn't really want to invest in media anymore. But how do you get that deal done jessica. I mean to be fair. I don't think you had to be like a psychic to see. The verizon was gonna end up selling that business like when hans vestberg came on. Who's their ceo. Now when he came on a few years ago he was pretty. He was pretty clear on telegraphing that he wasn't interested in buying media. Companies in the same way that the former ceo had been having said that jonah got early right like short a few months after hans started in two thousand eighteen. Jonah reached out to him. They developed a relationship a few months after that in two thousand nineteen. Jonas said hey. I want to buy the business. And he you know the good pitch he was one of the founders of huff po. She understood how to make that content attractive to advertisers how to make it viral. How have would fit in with buzzfeed like it was a very logical combination and he was so convincing that for is basically gave him. The isn't it. i mean you know. Buzzfeed did not spend any cash. Four for half. Oh you know Verizon agreed to buy minority stake in buzzfeed at a valuation of one point seven which was what the height of its valuation. Was they also spend you know. Tens of millions of dollars. I was told towards any future liabilities. Buzzfeed might have from the acquisition and so it was pretty good. Deal this kind of a win

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