A debacle do BuzzFeed – que nem a AI conseguiu salvar (ainda)
O BuzzFeed – uma empresa digital de mídia outrora promissora que chegou a valer quase US$ 2 bilhões na Bolsa – recorreu à AI para tentar salvar sua operação moribunda, mas os resultados até agora foram decepcionantes. A ação da empresa caiu 40% na semana passada, aprofundando seu status de penny stock , após o management reportar mais um prejuízo líquido trimestral.
BuzzFeed, a once-promising digital media company once valued at nearly $2 billion, attempted to revive its struggling operation by utilizing AI, but the results so far have been disappointing. The company's stock price plummeted by 40% in the previous week, deepening its status as a penny stock, following the management reporting another quarterly net loss.
Byron Allen, a TV presenter and media investor who purchased BuzzFeed and assumed the CEO position in May, stated that the company is undergoing a transition and should start delivering results in the next quarter. However, few investors are willing to pay to see these results. Founded in 2006 by Jonah Peretti, a graduate of MIT's Media Lab, BuzzFeed gained popularity quickly due to its focus on viral content and lightweight formats like lists and quizzes.
During times of crisis in traditional journalism, BuzzFeed and other digital media companies like Vice and Vox were seen as the future of the sector, attracting funding and time to develop a profitable business model. However, this never materialized. Between 2008 and 2016, BuzzFeed raised nearly $500 million in rounds with investors like NBCUniversal, Softbank, and A16z, but like traditional newspapers, it still relied on Big Techs for content distribution, which ultimately limited its advertising revenue.
Meanwhile, BuzzFeed invested in a journalistic operation called BuzzFeed News, which had correspondents and bureaus in various countries, including Brazil. Despite receiving praise, the division never turned a profit. When BuzzFeed opened its capital in a merger with a SPAC in 2021, the company was already indebted and did not take long to plunge into crisis.
In his final act as CEO, Peretti decided to focus on materials produced by AI, such as quizzes, travel guides, and videos. However, due to the questionable quality of the content, the measure also failed, and at the beginning of the year, the company said it had "substantial doubts" about its ability to continue operating. It was then that Allen entered, paying $120 million for a business that had already been worth $1.7 billion, assuming the CEO role and giving Peretti the position of "president of AI."
Allen laid off 33% of the workforce and said his goal was to use AI's power to expand BuzzFeed's businesses in areas like free video streaming. The executive even spoke of competing with YouTube for leadership in this market, at a time when Alphabet itself complains about slower growth in advertising revenues. With BuzzFeed's stock price below $1, the market even gave Allen a vote of confidence, but it seems to have thrown in the towel after the company announced a 18 million dollar net loss in the third quarter. BuzzFeed is now worth $46 million on the stock market.
Written by urgent.news from Brazil Journal's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
