BuzzFeed gets expansion cash with NBCUniversal tie-up

BuzzFeed, the website which lives off viral and "shareable" news, got a major boost for expansion plans Tuesday with a $200 million investment from NBCUniversal.

The deal with NBCU, a division of the media and cable conglomerate Comcast, calls for "strategic partnerships" between the two groups, which could allow sharing of content between BuzzFeed and the vast NBC television operations.

The deal values the "social news" pioneer at some $1.5 billion, according to several media reports. The companies did not comment on the valuation terms of the investment.

"It's a fascinating time for the media industry; social, mobile, digital, and broadcast platforms are converging to create new opportunities to connect with global audiences," said Jonah Peretti, BuzzFeed's founder and chief executive.

The news comes just a week after NBCUniversal announced a similar $200 million injection into another digital news group, Vox Media, and highlights the potential seen in online news as consumers move away from traditional media.

"BuzzFeed has built an exceptional global company that harmonizes technology, data and superior editorial abilities to create and share content in innovative ways," said Steve Burke, CEO at NBCUniversal.

"They reach a massive, loyal audience and have proven to be among the most creative, popular and influential new media players. We are pleased to be making this investment and for our companies to partner and work together."

The investment follows Monday's announcement that BuzzFeed would launch a Japanese news website in a partnership with Yahoo Japan, the latest step in a global expansion push.

BuzzFeed is one of the largest pure-play digital websites, claiming to reach some 200 million users worldwide.

With its recent expansion, the group says some 45 percent of traffic now comes from outside the United States, having launched editions in Britain, Brazil, France, Australia, India, Germany, Mexico and Canada.

BuzzFeed, founded in 2006 by Huffington Post co-founder Peretti, was known for offbeat "shareable" news but has been investing in new staff and technology as it expands globally.

NBCU was created as a joint venture with the NBC broadcast group and Universal Pictures, previously controlled by France's Vivendi. Comcast took full control of NBCU in 2013.

- Profiting from sharing -

While BuzzFeed's finances are not made public, documents leaked last week by the website Gawker suggested it is making a profit -- some $2.7 million in the first six months of 2014 and $7 million in 2013.

Rebecca Lieb, an independent media consultant and analyst, said BuzzFeed "has successfully captured mass eyeballs, which is difficult in an era of highly specialized and topical information."

BuzzFeed "is good at picking topics which are light and entertaining and shareable," Lieb told AFP.

Additionally, she said BuzzFeed has successfully reached younger audiences who often don't read newspapers or subscribe to cable television, and that this group is attractive to advertisers.

BuzzFeed also has been able to optimize its content by using algorithms that show which stories are viewed and shared most often, and prioritizing these items, Lieb said.

She added that the website is strong in "native" advertising, which includes "sponsored" and similar content.

The tie-up with NBCU offers potential, Lieb said, such as snippets of Olympic videos which could be offered to BuzzFeed and drive consumers to watch more on television.

Kenneth Lerer, BuzzFeed's executive chairman, said in a statement that the tie-up could mean "collaborating on television content, movies, the Olympics, and joint partnerships with ad agencies and brands."

Last year, BuzzFeed said it had secured $50 million in a deal that reportedly valued it at $850 million. But the latest injection vaults it into the club of "unicorns," a term used for startups valued at over $1 billion.

Vox is believed to be worth over $1 billion following its recent cash infusion from NBCU. And Vice Media last year secured some $500 million which boosted its valuation to a reported $2.5 billion.

One of the largest digital-only news groups is the Huffington Post, whose future is uncertain after its parent company AOL was sold this year to telecom giant Verizon.