When BuzzFeed confirmed its plan to go public on Thursday, it made the pitch that it can accelerate growth through newer, fast-growing businesses like commerce. Yet the details of its presentation to investors show BuzzFeed still expects to be heavily reliant on advertising, a business in which it has struggled to grow over the past few years.
BuzzFeed told investors it expects to generate $654 million in revenue next year, up 25% from this year, with traditional advertising accounting for 48% of the total and the rest coming from commerce and content. However, the “content” business consists mostly of making videos and articles that look like editorial items but are actually ads. That means close to 77% of BuzzFeed’s revenues next year will effectively come from advertising. By 2024—when the company projects it will surpass $1 billion in top-line revenue for the first time—these advertising-based revenue streams are expected to account for nearly 69% of the business.