BuzzFeed, one of several digital-media outfits that have grown quickly in recent years, had been targeting revenue of around $350 million in 2017 but is expected to fall short of that figure by about 15% to 20%, people familiar with the matter said. BuzzFeed said in a statement that it would still show revenue growth for the year and had made steady gains in increasing its audience.
The Wall Street Journal reports other digital-media companies also are struggling to meet investor expectations in an increasingly fierce advertising environment. Though digital advertising is growing, the competition has intensified. Vice Media, the biggest in the emerging sector by revenue, also is expected to miss its revenue target of more than $800 million this year, people close to the company said.
Mashable, a site known for tech and pop-culture content, agreed on Thursday to sell itself to trade publisher Ziff Davis for $50 million, people familiar with the matter said, a fraction of the $250 million valuation it received in its last investment round in March 2016.
Across the industry, digital-media companies are finding that lines of business that caught fire for them early on—like creating custom content for brands—are becoming harder to scale up. Meanwhile, with each passing year, Google Inc. and Facebook Inc. are tightening their grip on the online-ad market.
That “duopoly” is expected to command a combined 63% of U.S. digital-ad spending in 2017, according to eMarketer, boosting competition among everyone else for what is left.
At BuzzFeed, some investors have become worried about the company’s performance and rising costs for expansions in areas like news and entertainment.
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