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BuzzFeed CEO Jonah Peretti. Photo: Nicholas Hunt/Getty Images

BuzzFeed has agreed to buy progressive news website HuffPost from Verizon Media in an all-stock deal, the companies announced Thursday.

Why it matters: HuffPost was once one of the most-trafficked news websites on the internet, but an over-reliance on social media distribution and a lack of strategic vision stripped the site of relevance in recent years.

  • The company — which was co-founded as The Huffington Post by BuzzFeed founder and CEO Jonah Peretti, Arianna Huffington and media mogul Ken Lerer — was renamed HuffPost in 2017.
  • Its big, bold headlines and its sprawling network of contributors allowed it to scale across the internet quickly.
  • Verizon Media has been looking for a buyer for HuffPost for years.

Deal details: Verizon Media will invest in BuzzFeed, taking a minority stake in company. The deal is expected to close at the beginning of next year.

  • According to an internal memo sent from Peretti to staff, little will change in the short term on a day-to-day-basis. "Our business strategy is to make sure that the two newsrooms maintain their own identities to preserve the big and loyal audiences that each has built up," he wrote.
  • BuzzFeed News will remain a separate news organization, as will HuffPost. HuffPost will continue to operate its own website, social channels and app. It will also have its own editor-in-chief, which the company is still looking to hire.

What's in it for BuzzFeed? Scale for cheap.

  • BuzzFeed will add HuffPost to its network of big internet brands that perform well on social media and are good for selling commerce, like Tasty.
  • In a memo to employees about the deal obtained by Axios, Peretti said "HuffPost is one of the few digital content brands that is universally known, with significant scale, and a passionate, loyal audience that is different from ours."

What's in it for HuffPost? A lifeline.

  • Verizon has had to write down nearly half of its media investments that stem from pricey acquisitions of sites like AOL and Yahoo.
  • AOL bought HuffPost for $315 million in 2011. At the time, HuffPost's sale was considered one of the most successful venture capital exits in media.

What they're saying: The companies are billing the deal as a combination of synergies that will "unlock revenue for both companies through content syndication, new sales opportunities, commerce and [augmented reality]."

  • “Verizon Media’s strategy has evolved over the past two years to focus on our core strength — ads, commerce, content and subscriptions," said CEO Guru Gowrappan.
  • "With the addition of HuffPost, our media network will have more users, spending significantly more time with our content than any of our peers," said Peretti.

The big picture: Media consolidation has picked up speed over the past year, as the industry scrambles to survive the tough economic climate made worse by the coronavirus pandemic.

What's next: Verizon Media says HuffPost will still be a content syndication partner for its distribution brands, like Yahoo — and that BuzzFeed will be able to syndicate content across Verizon’s Media brands. Verizon Media, which has a strong ad sales infrastructure, will continue to do ad sales for HuffPost.

Note: Former HuffPost co-founder and chairman Ken Lerer, who also served as the chairman to BuzzFeed, is an investor in Axios.

Go deeper

Dec 15, 2020 - Economy & Business

Scoop: Vox Media Studios targets $100 million in 2021 revenue

Vox Media Studios website

Vox Media Studios, the video and audio production arm of Vox Media, is planning to bring in $100 million in 2021 revenue while producing twice as many shows as 2020, according to sources familiar with the company’s plans.

Why it matters: Vox Media hasn't been immune from the pandemic’s financial headwinds on digital publishers, but the studios revenue would be a huge number for the company, which reportedly expected $300 million in overall 2020 revenue.

Dan Primack, author of Pro Rata
32 mins ago - Economy & Business

Scoop: Red Sox strike out on deal to go public

Illustration: Sarah Grillo/Axios

The parent company of the Boston Red Sox and Liverpool F.C. has ended talks to sell a minority ownership stake to RedBall Acquisition, a SPAC formed by longtime baseball executive Billy Beane and investor Gerry Cardinale, Axios has learned from multiple sources. An alternative investment, structured more like private equity, remains possible.

Why it matters: Red Sox fans won't be able to buy stock in the team any time soon.