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The Desperate Year of the Digital Media Titans

BuzzFeed’s acquisition of HuffPost might be good for both companies, but it reflects an industry that’s long past its vibrant period of upstart energy.

Drew Angerer/Getty Images

Six years ago, The New York Times surveyed the media landscape and found that the paper of record was lagging behind. Digital upstarts like BuzzFeed, HuffPost, and Vox Media were not only setting the pace, they were dictating the terms of the future. “They are ahead of us in building impressive support systems for digital journalists, and that gap will grow unless we quickly improve our capabilities,” a committee studying the paper’s digital output wrote. “Meanwhile, our journalism advantage is shrinking as more of these upstarts expand their newsrooms.”

In retrospect, that report feels like a high-water mark for all those digital media upstarts. While it was undoubtedly a wake-up call for The New York Times, the widely trafficked report also seems like it arrived to spark a resurgence of legacy outlets more broadly. Whether or not history will credit it for precipitating a change, that change is nevertheless apparent. Aided by a new focus on digital journalism and products and the 2016 election (and, in The Washington Post’s case, a new owner, world’s wealthiest person Jeff Bezos), traditional heavyweights have dominated the media industry in the Trump era. Digital outlets, meanwhile, have not only lost their head start, they face exceptional headwinds. Revenues have fallen steeply, thanks in large part to Google and Facebook’s advertising duopoly. The Post and the Times are once again treating them as feeders, hoovering up top talent at will. Waves of consolidation, job cuts, and closures have defined the last half-decade in digital media, with no clear sign that the bottom is yet in sight.

Last week, one of the online behemoths over which the Times once fretted, BuzzFeed, purchased another of the same, HuffPost, in an all-stock deal; HuffPost’s parent company, Verizon, also announced it would be taking a minority-ownership stake in BuzzFeed and making a cash investment. It’s interesting to remember how HuffPost’s first big move—its merger with AOL—was an event that sent shockwaves through the industry. That acquisition was announced not long after the conclusion of Super Bowl XLV and, for many in the media industry, instantly changed the conversation from the Green Bay Packers’ win. In 2020, there’s none of that hoopla: It’s just the latest dustup in a bleak digital media landscape dominated by concentration and contraction.

Two years prior to last week’s HuffPost merger announcement, BuzzFeed founder Jonah Peretti suggested to The New York Times that mega-mergers were the future of online media. “A larger entity could lobby for a higher percentage of the ad dollars Facebook and Google share with publishers whenever their content, videos in particular, runs on the platforms,” the Times’ Edmund Lee explained. “In turn, publishers can supply them with content that is safe for users and friendlier for advertisers.”

Peretti went on to name-check a number of publishers: Vox Media, Vice Media, Group Nine, Refinery29. Each of these has made a significant acquisition since. As Columbia Journalism Review’s Jon Allsop wrote last week, “Vice Media bought Refinery29, Group Nine bought PopSugar, and Vox Media bought New York Media, which publishes New York magazine.”

BuzzFeed’s acquisition of HuffPost is arguably a bigger deal than all of those, bringing two of the most important web publishers under one umbrella. For the moment, BuzzFeed and HuffPost are expected to continue operating separate, competing newsrooms, though both will be overseen by current BuzzFeed News Editor Mark Schoofs. Peretti has pledged that BuzzFeed, which had significant layoffs last year but has been profitable for the last two quarters, will not face any staffing cuts but has refrained from making the same pledge to HuffPost employees.

With high overhead expenses, layoffs at HuffPost have been anticipated ever since the company was first rumored to be up for sale earlier this year. Indeed, the speculation at the time suggested that Verizon was looking for a buyer precisely because the company wanted someone else to do the dirty work of firing people; the cash investment Verizon made as part of the deal with BuzzFeed is understood to help cover severance packages.

Current and former newsroom employees from both companies are hopeful the merger might help protect the jobs of HuffPost’s journalists, which might not have been the case had another suitor ended up with the media property. For a digital media deal cut in 2020, there is a surprising amount of optimism being expressed by both companies: BuzzFeed believes that it will get more scale, which it can turn into revenue and, hopefully, reinvest in meaningful journalism. The merger is, in some ways, reminiscent of Random House’s 2013 acquisition of Penguin, which created a publishing juggernaut that is better positioned to deal with Amazon than smaller competitors; a BuzzFeed-HuffPost union won’t take on Facebook and Google but will be in a better position to survive the scorched earth advertising world these two dominant Silicon Valley firms have wrought.

In a postsale interview with Recode’s Peter Kafka, Peretti made the somewhat counterintuitive argument that the Times’ growing dominance was an opportunity. Its subscription model has brought it riches—and the ability to seemingly poach whomever it wants, whenever it wants—but it has also underlined its status as a paper catering to elites.

“A subscription business model leads towards being a paper for a particular group and a particular audience and not for the broadest public,” he argued. “Will a subscription newspaper that is read by a subset of society have as big an impact as it could on voters, on the broad public, on young people, on the more diverse rising generation of millennials and Gen Z? I think there’s a huge opportunity to serve those consumers. And not all of them are going to be subscribers to any publication.” This populist-ish argument has always driven BuzzFeed’s ambition and its appeal, both to investors and readers. It’s not surprising to hear Peretti reaffirm it, in his argument that the HuffPost acquisition demonstrates that the company still, after a few tumultuous years, represents the next generation of American media.

But even with BuzzFeed’s recent success and the relative optimism surrounding this acquisition, the world of online media remains a tumultuous one. No one knows for sure how the post-Trump era might shake up the media landscape. Trump has often chided the media with warnings that its revenue will almost certainly fall without him in the White House; he’ll have the chance to see that theory tested soon enough.

Nevertheless, while The New York Times’ gravitational pull seems likely to endure, Covid-related revenue losses have led to widespread layoffs in a number of newsrooms. The world of online media, moreover, doesn’t have the same sense of energy or competitiveness it did even a few years ago. There are far fewer digital outlets occupying real space in the daily discourse and almost none that feel like the small, scrappy, and genuinely independent outlets of the past. The most recognized talent keeps getting poached by traditional outlets, either newspapers or cable television. Not that long ago, a merger between BuzzFeed and HuffPost would have caused tremors throughout the industry. But in 2020, after years of turmoil and cutbacks, it seems like just another rearrangement of deck chairs, more desperate than enterprising, and not likely to catalyze a change in the depressing fundamentals of a struggling industry.