Can BuzzFeed maintain its success as a public stock in the competitive digital media landscape?

• Few digital media companies have made it onto CNBC's annual Disruptor 50 list in its 10-year history due to the challenging nature of the business.
• In 2006, BuzzFeed was founded with the goal of creating viral content on social media, such as popular lists, videos, and memes. The company achieved this mission and was included in CNBC's inaugural Disruptor 50 list in 2013.
• Can BuzzFeed, which began as a tech start-up, develop into a substantial media company after being publicly known for a decade?

CNBC examines the progress of companies on the Disruptor 50 list, 10 years after their initial recognition.

Few digital media companies have made it onto CNBC's annual Disruptor 50 list in its 10-year history due to the challenging nature of the industry.

With the increasing importance of online presence, it is the gatekeepers of the internet who control the majority of the profits, such as Facebook and advertising. As a result, BuzzFeed's focus on viral content made sense, aligning with the rise of Facebook and advertising shifts. Similarly, CNBC's inaugural Disruptor 50 list in 2013 recognized the success of a company that started in 2006 with a focus on uplifting content through lists, videos, and memes, which were amplified by social media.

Relying on internet giants for SEO or viral success carries a risk, as their algorithms and business goals can change, potentially harming the latest successful digital media model, or causing audiences to move on from the latest content trend.

Since its inception, BuzzFeed has made an effort to blend snackable content with investigative journalism, earning a Pulitzer Prize and being at the center of the media storm during the Trump presidency over the "Steele dossier" when its editor-in-chief Ben Smith decided to publish the document.

In recent years, digital media companies have faced financial challenges, with investors becoming cautious about the future. Notably, BuzzFeed failed to meet its 2015 revenue targets.

BuzzFeed's shift towards a "distributed" media strategy aimed to expand its audience beyond its own platforms, but generating significant advertising revenue from large Facebook clicks proved to be a challenge.

BuzzFeed has been successful in exploring new revenue streams, such as Tasty, a Facebook video brand focused on food, and other branded video projects. However, the content industry's disruption by streaming services and new content curation methods eventually caught up with the original disruptors.

The ongoing struggle between content creators and distributors in media is nothing new, and digital media companies with ambitious growth plans in a competitive market may face challenges like BuzzFeed did in 2019 with layoffs.

Despite experiencing a decline in digital advertising due to pandemic quarantines, BuzzFeed flirted with profitability a year later. The company then began to expand, acquiring HuffPost from Verizon Media in a deal that brought together BuzzFeed co-founder and CEO Jonah Peretti with HuffPost, a site he co-founded in 2005 with Andrew Breitbart, Arianna Huffington, and investor Ken Lerer.

As 2020 drew to a close, digital media companies rebounded, and this coincided with the rise of SPACs, which experienced explosive growth in initial public offerings as a new wave of stock investors poured into equities following the brief pandemic market crash. Additionally, the public market surge enabled original venture capital investors, including Buzzfeed's Series A investors, to finally receive the returns they had been waiting for since 2008.

Despite initially falling 39% in its first week of trading in December, the company's trading performance has not improved.

According to CNBC's Alex Sherman, Buzzfeed's debut on public markets was not promising for the prospects of digital media companies. However, Sherman noted that there was a silver lining: Buzzfeed's valuation provided a public market comparison for its peers.

As reported by Sherman, the speed of consolidation in the industry will depend on the personalities of those in charge, according to BuzzFeed's announcement that it will begin rolling up the industry as a public company.

"BuzzFeed's future prospects may attract consolidation if outsiders believe in its equity. The company can use its equity as currency for acquisitions," he wrote.

Can BuzzFeed successfully regain investor confidence by making the right calls on scale, distribution, and audience, all while navigating a media landscape that favors disruption?

—CNBC’s Alex Sherman contributed to this report.