Buzzfeed is making money. The real-time social web publisher reached profitabilty in August this year, has 300 staff, more than 85 million unique browsers a month and is set to join the ranks of the biggest online publishers around.
Founder Jonah Peretti last night released an internal staff memo via Linkedin in which he set out the year so far and what lies ahead. We started taking Buzzfeed seriously before its VC funding total reached $45 million but Peretti's highlights bring into focus just how fast it is growing:
-- Buzzfeed has tripled its traffic in the last year and is now eight times bigger than it was two years ago. The measurement systems are not really comparable, and the stats are unaudited, but 85 million uniques would make it bigger than almost every established newspaper website.
-- The site built all its editorial technology from scratch. Others have tried this - the Guardian sunk many millions of pounds and much of its staff's sanity in building the internal R2 system - but Buzzfeed has built that, plus data science products too, with far less overheads.
-- In four years the business has gone from no revenue to profitability, with as many as 700 sponsored "social content advertising" pieces expected this year featuring 50 of the top 100 advertising brands, compared to more than 300 last year.
As Peretti puts it:
We have the potential to be a defining company, the same role the traditional media companies played decades ago.
These companies were once small and scrappy like us. They faced the skepticism of their incumbents, they pioneered new models, embraced new technologies, and succeeded because they served their audience better than what came before. This is a great aspiration for us as well.
Youth opportunities and challenges
There are risks to what Buzzfeed is doing - it's always a difficult trick to take a startup through this kind of rapid growth, going from small costs to what must now be a very significant costbase. But I do think its emergence raises importance questions about the role of media and young people.
Commentators get caught up on the animated gifs of cats, the listicles and quizes. Many don't mention the long-form political reporting that's becoming increasingly international, with correspondents around the world.
Either way, this is missing the point. The USP for advertising clients is this: "The majority of our readers are 18-34 year olds who are educated, active online, and culturally aware. We have more expertise about social content than any other company. We can light up the social web for an advertiser across Facebook, Twitter, and YouTube, with content that is worth clicking and sharing," as Peretti says. It's "content for people that grew up on the web, whose entertainment and news interests are largely neglected by television and newspapers."
Frankly, I have no idea why this would be the "media industry's worst nightmare", although some aren't keen on the blurring of commerce and editorial. Buzzfeed is a route to influencing the digital native generation. This is a function that can't be performed through the now standard model of online advertising and it has implications for all manner of consumer-facing media businesses.