Andreesen Horowitz invests $50 million in BuzzFeed
The New York Times reported last night that venture capital firm Andreessen Horowitz would be investing $50 million in BuzzFeed. The investment, according to an unnamed source, values BuzzFeed at around $850 million.
The cash, according to BuzzFeed’s official press release this morning, will be put toward drawing clearer distinctions between all of the different elements of the BuzzFeed operation. The editorial team—that is, the people who produce the content (both journalistic and otherwise) that probably constitutes most readers’ impressions of BuzzFeed—will be expanded into three divisions, all reporting to editor-in-chief Ben Smith. “BuzzFeed’s editorial team will grow and become BuzzFeed News, Buzz, and Life to expand its offerings across the board and to make clear the differences between the three types of content,” the release reads.
(For those unfamiliar with BuzzFeed kremlinology—why are you reading this? save yourselves, while you still can—‘BuzzFeed News’ refers, broadly, to the folks at BuzzFeed who are doing original writing and reporting, while ‘BuzzTeam’ refers, broadly, to the folks who are aggregating stuff from Reddit. BuzzFeed Life, a new division, will focus on lifestyle and service journalism.)
Making “clear the differences,” though, does not sound like something everyone is necessarily interested in. At BuzzFeed, “Internet native formats like lists, tweets, pins, animated GIFs, etc. are treated as equals to older formats like photos, videos, and long form essays,” Chris Dixon, a general partner at Andreessen Horowitz who will be joining BuzzFeed’s board, wrote on his blog.
It seems possible, at least, that the absence of clear distinctions has, perhaps, to some extent, enabled and empowered the side of BuzzFeed that generates the most revenue—not the editorial team, despite its success in reaching a seemingly ever-increasing audience, but BuzzFeed Creative, essentially a 75-person advertising firm operating under the broader BuzzFeed banner. BuzzFeed Creative, the Times reports, generates most of the company’s revenue by offering brands “the publication’s ethos, and writing and video-making skills, as a way to reach consumers.”
In a bit of rather impeccable timing: Yesterday, the Times also published a short profile of the John MacArthur, the notoriously anti-Internet publisher of Harper’s magazine. MacArthur, essentially, refuses to make anything published in his magazine available online for free. But this is probably not even the most interesting ideological difference between MacArthur and someone like BuzzFeed’s Jonah Peretti; rather, the most compelling question that these two figures offer very different answers to is that of a publication’s purpose. “A magazine should be a magazine,” MacArthur told the Times’ Ravi Somaiya. “A newspaper should be a newspaper.”
Are such statements meaningless? Maybe, maybe not… though, set as a counterpoint to a company like BuzzFeed, which one might think of as a Web publication—analogous, in its own way, to a magazine or a newspaper. But BuzzFeed isn’t just a Web publication: It’s an advertising firm, a movie studio, and, according to Dixon, a technology company.
Whether one model is “better” than the other is neither here nor there: Nobody really understands how the Internet works, or what it is going to look like in a year or 10 years or 160 years. And more pressingly, is it even appropriate to think about a Harper’s “model” or a BuzzFeed “model” when the former is a nonprofit funded by a foundation and the latter by almost a hundred million dollars in investment capital?
This is your semi-annual reminder that if The New York Times had been founded 5 years ago, not 160, it would be valued at $40 billion.— Mark Lotto (@marklotto) August 11, 2014