Shares of BuzzFeed leaped Thursday after a report revealed the struggling news outlet is getting paid millions to provide content to Meta’s Facebook and Instagram.
The beaten-down stock added 42 cents, to $1.37, a leap of over 44%, after earlier trading as high as $1.53. Never high-value since the company’s public debut in 2021 through a SPAC deal, BuzzFeed shares dropped below $2 in June and have topped that mark just a handful of times since then.
The Wall Street Journal cited “people familiar with the situation” Thursday in reporting that BuzzFeed is the beneficiary of a deal with Meta Platforms valued at close to $10 million to bring more creators to the social media giant’s feeds.
Though a small outlay for Meta, those dollars matter for BuzzFeed, which said in December it expects overall revenue for the fourth quarter of $129 million to $134 million.
The company laid off 12% of its staff that month across its sales, tech, production and content divisions, citing in part the “ongoing audience shift to vertical video, which is still developing from a monetization standpoint” as a reason why the company had to cut costs.
The partnership with Meta comes as both companies “are embracing the creator economy, in which individuals build large social-media audiences by posting videos and other content, and often make money on advertising or brand sponsorships,” the Journal reported.
The deal calls for BuzzFeed to help generate content for Meta’s social networks and train creators to grow their followings. BuzzFeed, known for its listicles and quizzes, has long specialized in analyzing what content online audiences seek out, dating back to its origins as an experiment by founder Jonah Peretti in internet virality. Facebook has long been an important source of traffic for its properties.
BuzzFeed Inc. also owns HuffPost, BuzzFeed Entertainment, Complex Networks and Tasty Lifestyle Brands.
A recent investor presentation noted that Tasty alone had over 300 million Facebook followers as of September.
Advertising accounts for about 37% of its revenue, the presentation said, while “content” accounts for 9% and “commerce and other” 19%.
The pact with Meta reflects the movement among creators to shift to TikTok in recent years and the social networking giant’s efforts to catch up. The Journal cited eMarketer data that showed TikTok’s global user base grew 18% last year, while Facebook plateaued and Instagram grew just 2.75%.
Nearly 2 billion people use Facebook daily, Meta claims. In 2020, it launched Instagram Reels to compete with TikTok’s videos.