As Buzzfeed kills its news division, a new report says Disney once wanted to buy the company for $650M

Former Buzzfeed Editor in Chief Ben Smith said in a new soon to be released book “Traffic” that was excerpted by a Vanity Fair web site that Disney head honcho Bob Iger once offered Buzzfeed founder Jonah Peretti up to $650 million for the company. Last week, Peretti said in an internal memo that he was laying off 15 percent of the staff that included everyone in the money losing news side of the business. Buzzfeed’s market cap today is only $85 million.

| 25 Apr 2023 | 12:11

The extent of the layoffs at Buzzfeed is still not preciely known after the once high flying tech company that built its fortune on lists and cat videos–but once won a Pulitzer Prize for its investigative journalism–said last week it was shutting down its entire news division.

Buzzfeed has yet to file a WARN notice with New York State detailing the size of its layoffs as of April 24, which would seem to suggest it is flaunting NYS regulations.

The company said in its April 20 announcement that it was shutting down of the news side of the business because it was not turning a profit resulting in the layoff of 180 people or about 15 percent of its total workforce.

“The New York State Worker Adjustment and Retraining Notification (WARN) Act requires covered businesses to provide early warnings of closures and layoffs to all affected employees, employee representatives, the Department of Labor, and Local Workforce Development Boards,” according to the New York State Department of Labor web site.

Its a bitter blow for the company that was once the darling of the social media age as it appeared to be upending the business model for legacy media company.

The company’s founder Jonah Peretti once spurned an offer from Disney CEO Bob Iger whereby the mouse house was prepared to pay up to $650 million for the company. The disclosure was from former editor in chief Ben Smith, whose soon to be released new book “Traffic: Genius, Rivalry and Delusion in the Billion-Dollar Race to Go Viral” was excerpted on the Vanity Fair web site, The Hive. The excerpt did what Buzzfeed once did so well, and that is generate “buzz” in media circles.

“When I joined the company as editor in chief in 2011, it was a popular destination for videos of cuddly critters and viral memes. I was tasked with building a news operation propelled by the social web, and as the Twitter-fueled 2012 election got going, we were competing with legacy media stalwarts and newcomers like my former employer, Politico, and getting on the radar of behomoths like Disney.”

Talks accelerated in late 2013. Smith details how he, company president Jon Steinberg and Peretti were on a balacony of a hotel smoking a joint after the meeting with Iger and other top Disney executives. Steinberg, according to Smith, was on his knees, begging Peretti to take the deal.

Peretti was originally looking for $600 million. Disney offered $450 million with a chance to earn up to $200 million more. “The deal really was, by any normal standard, a no brainer,” Smith writes in his upcoming book,”Traffic.

Ultimately, Peretti decided not to do the deal, even though he would have been one of only 13 executives reporting directly to Iger. “Peretti couldn’t see himself on this tight ship,” writes Smith.

Iger was supposedly furious with Peretti. “F*** him, he loses. That company will never be worth what it would have been with us,” Smith quotes Iger as telling colleagues.

Four months later, Disney bought Maker Studios for the same $500 million it was dangling before Buzzfeed.

Buzzfeed of course ultimately went public via a SPAC (Special Purpose Acquisition Corp.) which were all the rage for a brief few years. But Buzzfeed has fizzled and undergone layoffs in recent years in a changing economy and changing social media habits and algorithms.

In the fourth quarter of 2022, Buzzfeed had a net loss of $105.4 million on revenues of $134.62 million. Its stock price was under 60 cents on April 24 and its market capitalization was listed as only $85.4 million.

“When I joined the company as editor in chief in 2011, it was a popular destination for videos of cuddly critters and viral memes.” Former Buzzfeed editor in chief Ben Smith, now a partner in the media venture Semafor.