‘It pivoted into oblivion’: BuzzFeed sold off the company behind ‘Hot Ones’ to pay down its debt

A decade ago, BuzzFeed was redefining what news and entertainment on the web meant. The website’s mix of hard-hitting news, in-depth features, and viral listicles offered a vision of the future for journalism that many sought to follow. (I should know: I was a regular freelancer for the company.)

In 2014, BuzzFeed closed a $50 million round of investment from Andreessen Horowitz that valued the company at around $850 million. Around 150 million people worldwide visited the website every month, and the newsroom racked up some impressive accolades, most notably a Pulitzer Prize in 2021.

But a lot has changed since then. That news division is long gone, the company has undergone a series of layoffs, and just this month it sold off its golden goose for $82.5 million in order to meet a debt obligation. First We Feast, the BuzzFeed-owned media company behind the hit show Hot Ones, will now be owned by a consortium led by George Soros.

As one social media user put it, “That a dude with a couple cameras and a plate of appetizers can make something worth $82.5 million and a media company looks at that and goes ‘couldn’t we make even more money if we had AI do it?’ tells you exactly how stupid these people are.”

What gives?

“BuzzFeed was a media company that investors bought into expecting a tech company,” says Tom Phillips, the former U.K. editorial director for the site. “And they’re just very different businesses. Media is expensive, low margin, and hard to scale up rapidly.”

Trying to bridge the gap between buzzy tech company and functionally run business has long been a problem for BuzzFeed. That’s at both the high level, and the granular one—several former staff members have lamented the company’s excessive (and costly) office catering—but were useful to convince advertisers the company was the real deal.

Besides the spending, there was a fundamental dichotomy between BuzzFeed the media brand and BuzzFeed the tech company, according to those who worked there. “BuzzFeed really was a good media company that hired great people and produced some amazing work, and it could have been sustainable,” says Phillips. “But it always felt like they were chasing expectations around growth and return that they couldn’t realistically meet.” Phillips says those growth and return expectations in the frothy mid-2010s were overblown and unrealizable for even the biggest actual tech companies at the time, never mind a media company that some conceived of as a tech firm. Thus BuzzFeed’s continued contraction over time, resulting most recently in the sale of First We Feast and its Hot Ones show, where celebrities are interviewed as they eat spicy chicken wings.

James Ball, who worked at BuzzFeed’s U.K. branch until 2017, believes it could have built a sustainable business from either of its core branches: the main BuzzFeed listicle vertical, or BuzzFeed News, its journalism arm. But trying to meet unrealistic investor expectations doomed the company. “It never focused on building a good business, but just endlessly pivoted to try to do the impossible, until it pivoted into oblivion,” he says. “The BuzzFeed that exists now is a zombie business. It’s almost sadder to see it limp on like this than if it had just shut down with some dignity.”

https://www.fastcompany.com/91248830/buzzfeed-sold-off-hot-ones-company-pay-down-debt?partner=rss&utm_source=rss&utm_medium=feed&utm_campaign=rss+fastcompany&utm_content=rss