Disney reportedly tried to buy BuzzFeed, but there was a price disagreement

Posted Apr 29, 2014

Several months ago, Disney reportedly talked with BuzzFeed about a potential acquisition. However, there was a disagreement in the price, according to Fortune. Apparently BuzzFeed was seeking upwards of $1 billion and the talks are no longer active.

The last round of funding that BuzzFeed raised was in January 2013 at $19.3 million with a $200 million valuation. One of the triggers for the talks between BuzzFeed and Disney to fall apart was a deal with Maker Studios. Disney decided to acquire Maker Studios for $500 million plus possible earn-outs that could bring the deal closer to $1 billion.

Disney saw the opportunity to turn Maker into a “a call option on over-the-top content” from multichannel networks. Disney acquires and aggregates intellectual property, which can be monetized through many channels like licensing, merchandising, animation, and theme parks. BuzzFeed does not really match this criteria, especially with a $1 billion price tag.

BuzzFeed produces content like entertainment-related lists and serious reporting. BuzzFeed is now profitable, has over 300 employes, and is hitting over 85 million monthly unique visitors. BuzzFeed is forecasting revenues of over $120 million, according to Bloomberg. This is double its sales in 2013.

BuzzFeed raised a total of $46.3 million in funding from Hearst Ventures, Softbank Capital, Lerer Ventures, RRE Ventures, SV Angel, Founder Collective, New Enterprise Associates, and several angel investors. BuzzFeed generates revenue primarily through advertising, including “native advertising.” This means BuzzFeed sells sponsored content created by an editorial team designated to each brand.