BuzzFeed Struggles Signal an Uncertain Future for Digital Media
BuzzFeed emerged as a public company after a merger with special purpose acquisition company — or SPAC — 890 Fifth Ave. A SPAC is also known as a “blank-check company” and is used to raise money through an IPO with the goal of either acquiring or merging with another company.
There were 613 U.S. listed SPAC IPOs in 2021 and 248 in 2020, according to financial analytics platform Dealogic. If there was ever a time to go public through a SPAC, it was 2021, and Peretti jumped on that opportunity to take BuzzFeed public just before the new year. However, not only has there been a serious slowdown in SPAC mania, but the macroeconomic environment is tough, to say the least. So tough in fact that even a company like Google’s YouTube reported a seriousduring Q1. If digital advertising behemoths such as YouTube are having trouble, companies like BuzzFeed are definitely feeling the heat.
On top of all that, geopolitical risks caused by a war in Ukraine, sky-high inflation and supply-chain woes have injected a serious amount of uncertainty in the business world. And when there’s that much uncertainty, companies tighten their belts and spend less on things like advertising. Many other digital media companies, including Vox Media and Vice Media, were looking to BuzzFeed’s public debut as a sign of whether there was a real appetite among investors for digital media. Following BuzzFeed’s poor post-debut performance, other media companies seem to have decided that sticking to consolidating and gaining scale privately was the better move.
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