“For us, it’s a question of ambition and opportunity, and we are ambitious,” said Jim Bankoff, Vox Media’s chief executive. “We are going to evaluate our options, but we’re going to do it from a position of strength.” He would not comment on financial details or any potential deals.
Group Nine had talks with major publishers, including Vox Media, about a possible merger for its own SPAC listing, but so far none have materialized, according to three people with knowledge of the matter. Ben Lerer, the head of Group Nine, said in an interview that the company was “in an enviable position” given its recent sales growth.
“The SPAC obviously allows us to be even more ambitious,” he said.
An option for Group Nine would be a deal with one of its largest backers: Discovery Inc. The media giant recently orchestrated a daring takeover of WarnerMedia in an effort to better compete in streaming. Group Nine’s properties have helped drive hundreds of thousands of new customers to Discovery’s streaming platform through content partnerships, making it an attractive takeover target.
The digital ad market thrived during the pandemic, as people started spending more online; BuzzFeed, Vox Media and Group Nine all benefited. Still, their gains were nothing compared with the amounts brought in by the digital giants.
“Facebook, Google and Amazon’s crumbs are Vox, Group Nine and Buzzfeed’s cake,” said Brian Wieser, the lead analyst at GroupM, the media investing arm of the ad company WPP.
That disparity underlines the need of the ad-driven publishers to keep getting bigger.
BuzzFeed’s entry into the public markets is likely to give it an advantage. In addition to cash, it will be able to use its stock as currency to make another deal along the lines of its HuffPost purchase.
“We’ll have opportunities to pursue more acquisitions, and there are more exciting companies out there that we want to pursue,” Jonah Peretti, a BuzzFeed co-founder and the chief executive, said last month.
When asked if BuzzFeed would consider entering the subscription business, he said in a recent interview: “Sure, we’d consider it. Why not?”