Jonah Peretti, the founder of BuzzFeed, created a viral hitmaker for the millennial generation. His team of writers and videographers hot-wired social media to jump-start posts like “What Colors Are This Dress?” and “Michael B. Jordan Plays With Puppies While Answering Fan Questions.” He and the company were often hailed as the future of the digital media industry.
Now, he just needs to make sure BuzzFeed has a future.
Last week, BuzzFeed told investors that it faced a cash crunch and was at risk of not continuing as a business. The company fell on hard times over the last decade as tech giants siphoned ad dollars away from online publishers, and an attempt to expand through mergers hasn’t paid off. Its stock has cratered since it went public in 2021.
But in his first extended interview since BuzzFeed signaled potential trouble for investors, Mr. Peretti said he was optimistic about the future of the company. He said he was once again hoping to catch latest wave of technology reinventing the way people consume content: artificial intelligence.
“I’m going back to founder mode, and we’re building like a start-up again,” Mr. Peretti, 52, said. “There is more risk to that, and investors should be aware of the risk.”
To turn things around, Mr. Peretti is betting on a subsidiary of BuzzFeed called Branch Office, which will use A.I. to build new applications, including interactive games and communities. Branch Office is inspired by Nintendo, the Japanese video game maker, and will operate independently of BuzzFeed under its founder, Bill Shouldis.
Already in the works are three games: Conjure, a spooky mystery investigated by players who solve clues by uploading photos; BF Island, a chat app for inside jokes with friends; and Quiz Party, a community for co-creating and sharing BuzzFeed’s popular quizzes. Conjure is launching on Friday.
Each game emphasizes aspects of the media industry that Mr. Peretti thinks will become even more important in the age of artificial intelligence: human connection, community and aesthetic taste, he said.
“A company like Walt Disney used to make a lot of money from distributing and creating content, but now a higher percentage of their revenue is coming from parks,” Mr. Peretti said. “Which kind of fits the taste and culture and the shared experience.”
Over time, he said, BuzzFeed will try to reduce its reliance on digital advertising by generating more revenue from A.I. products through subscriptions. In-person events are another bright spot for the media industry, he added, citing the growth of Semafor, the media company co-founded by Ben Smith, a former editor in chief of BuzzFeed News and New York Times media columnist.
Mr. Peretti doesn’t appear to have a long time to make it all work. The company said in its annual report last week that it lost $10.9 million in cash last year and was carrying $58.4 million in debt. But there are some positive signs: the company has expanded its studio business, and its advertising revenue rose slightly last quarter, to $25.6 million.
Already, BuzzFeed has fallen short of the lofty expectations it set for investors like NBCUniversal, which in the 2010s invested $400 million in the company — founded in 2006 — at a peak valuation of $1.7 billion. As business continued to deteriorate, in 2023 the company shuttered its BuzzFeed News division, which had won a Pulitzer Prize, and laid off scores of employees as a result. HuffPost became its news flagship. Before things went south, Mr. Peretti rebuffed an overture from Disney in 2013 to acquire the company for $650 million, including up to $200 million if BuzzFeed hit performance targets.
Asked about that decision, he said he preferred not to dwell on the past.
“I think nostalgia is a dangerous emotion, and getting stuck in the past and clinging to the past is a bad strategy,” Mr. Peretti said. “It was undeniably awesome in 2014 to have President Obama name-checking us and to really truly feel like we could be a voice for the millennial generation, and have stuff go viral across all these platforms. But it’s dangerous to pine for something in the past.”
Mr. Peretti fielded questions about BuzzFeed’s uncertain future with a kind of grizzled composure that reflects two decades of navigating the stratospheric highs and benthic lows of digital media. He recalled toiling away with little notice in the years before BuzzFeed became popular, a period he said resembled the company’s current era.
“I feel like we’re back in that spot again where people have completely given up on digital media,” Mr. Peretti said, adding that it presented “an amazing opportunity” to think big.
BuzzFeed is taking steps to shore up its balance sheet, he said. The company could do that through a sale of some of its businesses, such as the viral food brand Tasty, the news site HuffPost and BuzzFeed Studios, which produces film, TV and short-form content. Or it could pursue a joint venture partner for some of the businesses it owns. Mr. Peretti said the parts of the company might be worth more than the value the market currently places on the overall business.
The company could also try to raise more money for its A.I. business. Mr. Peretti said raising money for Branch Office could appeal to investors interested in artificial intelligence but not in the older digital media businesses like HuffPost and BuzzFeed.com.
“If Branch Office becomes a juggernaut in this new space, that would be great for BuzzFeed even if it disrupted us in some ways or took share from us,” Mr. Peretti said.
Benjamin Mullin reports for The Times on the major companies behind news and entertainment. Contact him securely on Signal at +1 530-961-3223 or at [email protected].
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