BuzzFeed surges on content deal with Meta

© Reuters.

By Michael Elkins

Shares of BuzzFeed Inc (NASDAQ:BZFD) are up 31.51% in premarket trading on Thursday after it was announced that Facebook parent company, Meta Platforms (NASDAQ:META), announced that the social media company will be paying BuzzFeed millions of dollars as part of an effort to bring more creators to the social-media giant’s platforms.

According to The Wall Street Journal and people familiar with the situation, as part of a deal reached last year that is valued at close to $10 million, BuzzFeed agreed to help generate creator content for Meta’s platforms and train creators to grow their presence online. It couldn’t be learned if Meta is paying other publishers to generate creator content.

In 2016, Meta agreed to pay $50 million to a number of publishers, including BuzzFeed, to create live video content for the platform. The social-media giant eventually discontinued the program as its video approach changed.

However, recent years have seen creators flock to TikTok. According to research firm eMarketer, TikTok’s global user base grew 18% last year, while Meta’s Facebook plateaued, and its Instagram platform grew 2.75%.

Last year Meta announced it would stop paying news publishers to feature their content in its News tab and would reallocate resources to growing a creator business. The company launched Instagram Reels in 2020, in a push to compete with TikTok.

BuzzFeed, which went public in late 2021, has lost money in recent quarters, and its stock has recently traded around $1. In its most recent earnings report, BuzzFeed attributed the declining time users spent on its sites, in part, to declining traffic from Facebook users. Meta, in its latest earnings report, said nearly two billion people used Facebook daily.