It’s the time of year when Silicon Valley and mainstream media boom and bust. For the latter, it’s Dec. 6, or Black Friday, or Cyber Monday. For BuzzFeed, it’s the announcement of an IPO – Monday evening on Thursday in the UK – that could value the newly profitable company at as much as $1.5bn.
Wall Street is already betting big. Shares in the edgy, often factually dubious media company on Wednesday were up 25% before news broke of the IPO. On Thursday morning, they were up 35% on early morning rumors that it would be aiming to raise $200m.
But the Buzzfeed story is not a pretty one. And it’s not one that feels like it will get better.
The story of Black Friday – a thumping success for Amazon on this day after Thanksgiving, showing that powerful, well-funded tech companies are more competitive than ever – struck many people as both quaint and inopportunely upbeat for a technology story.
Amazon, once known for its grim physical warehouses and sales of expensive diapers and clothes, has built a business around simple e-commerce – same-day delivery, high-definition tablets and more – and has become an existential threat to companies like grocery store chain Kroger.
And BuzzFeed, with its promise of speed and speed of consumption, was – some might say – written as much about Amazon as it was about the holidays.
Sometimes, that’s the line in a tech story that is meant to move readers. I found it very weird: something old, something new, a little dystopian, a little Superbowl-era satirical alluding to a former company. This felt like the sort of thing made to peddle ideas – same-day delivery.
But Christmas comes later, like never before. Advertisers, fans and even employees of Amazon and other tech companies suddenly realized the company has more customers than the day after Thanksgiving weekend. With daily discounting and the recognition of Amazon as a warm fuzzy company where workers get holiday bonuses, it was a depressing way to settle the turkey-shaped question that used to be the most important story in tech: “Did somebody buy something?”
Still, there’s more story in the leaked BuzzFeed filings. From 2016, it’s clear that the company has been growing rapidly, which is normal for a new online company. It’s also clear that BuzzFeed is doing something different and innovative than traditional media.
More than one employee complained that the company was doing all these outside partnerships with other news outlets. You’d think BuzzFeed, which prides itself on its distinct brand, would have executives line up to say, “No, we will not work with other media companies.”
But that’s not what seems to be happening. There are lots of people in the Silicon Valley world who speak in terms of rapid validation of a product, a unique voice, a lot of data. By feeding lots of data back to BuzzFeed, which is already relatively data-rich, the company could find itself a lot of calls from small sites for BuzzFeed’s help.
It’s still unclear whether BuzzFeed would continue doing these partnerships after it goes public, but people around the company say they are. BuzzFeed is known for keeping its feet planted on the ground, for holding fast to core values, regardless of technology. They want to continue doing that, despite the IPO. It’s why the company’s IPO filing doesn’t include details of how the company will keep its operations different. In one document filed with the Securities and Exchange Commission, it notes that “we intend to continue to invest in our brand properties and other initiatives which we believe will continue to position us as the number one digital publisher.”
And that’s one of the most scary aspects of a BuzzFeed IPO – the knowledge that more money will be thrown at the company, which will now be larger and more powerful. Would BuzzFeed still be BuzzFeed if there were not so much money involved?
After the leaks of the deal became public, there were more than a few jokes on Twitter and other sites about how unlikely it was that it would succeed. Or, at least, on how unlikely BuzzFeed, whose media DNA is based on sharing news on social media, would be able to cut itself off from its biggest investor. Buzzfeed loves Facebook. For an online media company, Facebook is the story.
It’s also likely that all this Wall Street