Verizon Mulls Selling HuffPost
|Guru Gowrappan, CEO, Verizon Media Group.
Photo credit: Verizon
Verizon, the telecom giant which also happens to have a quite large digital media operation, is seeking to sell one of its most popular media properties, news site HuffPost, to potential suitors including famous digital media upstarts like Vox Media, Group Nine, and Bustle Group, according to a report from the New York Post. According to the Post, Verizon has shopped HuffPost around to suitors amid significant losses and as it seeks potential buyers that could help cut costs and stabilize its operations. Among prospective buyers who were pitched to include Vox Media, a media company famous for brands like The Verge, Vox, and Polygon, and Group Nine Media, a company whose CEO, Ben Lerer, happens to be the son of HuffPost co-founder Ken Lerer. According to the Post, both companies passed on acquiring the news property, leaving other potential suitors such as media upstart Bustle Group, Rolling Stone publisher Penske Media, and J2 Global, a publicly-traded digital media company.
According to the New York Post, HuffPost currently brings in between $45 million to $50 million a year in revenue while gobbling up annual expenses of between $60 million and $70 million. In this year when a coronavirus pandemic has led to widespread advertising cuts, HuffPost is predicted to likely bring in a lower $40 million in revenue, which would imply bigger-than-usual losses for this year. Verizon is said to be looking to retain a minority stake even after a possible sale of HuffPost, which currently has roughly 200 employees including a unionized editorial staff.
Many digital media companies have struggled to generate strong revenues as they battle for dollars in a digital advertising market dominated by social networking sites like Facebook and search engines like Google. Such a situation has led to consolidation among popular digital media properties in recent years and also widespread layoffs and job cuts across the industry. Companies like Vox Media, Group Nine Media, and Bustle Group have held together as collectives of various digital media properties to help boost business and have also ventured into other revenue streams such as e-commerce in order to stand firm.
HuffPost, one of the most popular digital media properties, has a long and storied history, beginning from its founding in 2005 to its $315 million acquisition by AOL six years later. Verizon got hold of the media brand after it acquired a struggling AOL for $4.4 billion in 2015. The brands acquired by the telecom giant are now housed under the Verizon Media Group, whose other popular brands along with HuffPost include Engadget, TechCrunch, and Autoblog.
HuffPost is currently lacking a permanent top editor since its former editor-in-chief, Lydia Polgreen departed for Spotify-owned Gimlet Media in March of this year. Her replacement has not yet been named.