BuzzFeed Sheds Assets. Now It Should Go Private, Experts Say

That leaves BuzzFeed with the dilemma of finding a partner to take it private.

It is possible that the company has lined up a buyer to take it private and that the sale of First We Feast was the first step in a broader plan, according to Thompson and Berstein. The spin-off significantly cleans up BuzzFeed’s balance sheet, making it a more attractive acquisition.

But private equity has largely soured on the digital media industry, leaving the pool of potential suitors small, according to an M&A analyst who asked to remain anonymous. It might find interested buyers in a hybrid capital fund, like HPS Partners, or from a content network like Taboola or ZergNet. 

The uncertain future of HuffPost

If the company were considering a return to private ownership, it might also be reassessing what role HuffPost plays in its business, according to all four sources.

The BuzzFeed portfolio now contains only two owned-and-operated titles: BuzzFeed and HuffPost, which BuzzFeed acquired in November 2020 for an undisclosed price. BuzzFeed also owns the recipe franchise Tasty.

The company’s financial maneuvering over the last year—selling Complex and First We Feast—suggests that it is more than comfortable with paring down its assets.

And BuzzFeed has also signaled that its future lies in a direction that might not align well with HuffPost. 

It began using generative artificial intelligence last year to create content for little cost, which runs counter to the more standard news-gathering operation of HuffPost. It also singled out “high-margin, tech-enabled revenue lines,” such as affiliate marketing and programmatic advertising, as key to its future, according to BuzzFeed chief financial officer Matt Omer.

By creating content with GenAI and then monetizing it with automated ads, BuzzFeed could operate profitably if it maintained an incredibly lean structure, according to Berstein. But that model is harder to implement for HuffPost, as its content production processes could be difficult to automate.

As a result, there is a possibility that BuzzFeed could look to divest HuffPost as well, then find a suitor to take it private and run it as a small but profitable business, according to Morrissey. Whatever route it takes, the company has bought itself breathing room with its recent sale, but it still has plenty of difficult decisions ahead of it.

“BuzzFeed is a brand that was built for a different era,” Morrissey said. “And when that’s the case, change is nearly impossible.”