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BuzzFeed didn't cut its 2016 forecast in half, says BuzzFeed chair Ken Lerer

"Anyone who thinks that this isn’t a terrific time to be in digital content is dead wrong."

Asa Mathat for Re/code
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

BuzzFeed’s doing fine. So is the digital media business. Everything’s going to be great, as long as you understand that everything is changing.

That’s the message from BuzzFeed chairman Ken Lerer, who disputes an industry-rattling report that the company has “slashed” its projections for 2016 after missing last year’s goals.

“Anyone who thinks that this isn’t a terrific time to be in digital content is dead wrong,” Lerer said. “It’s a fantastic time.”

While the Financial Times reported Tuesday that BuzzFeed had cut its 2016 revenue goals in half, from $500 million to $250 million, Lerer says the company’s board hasn’t changed its forecast for this year. He says the company met its projections for the first quarter of this year and is on pace to exceed its projections in Q2 and the rest of the year.

“There’s nothing cratering in the industry. It’s better than ever,” Lerer said. “It’s just different. And if you want to succeed, you have to open your eyes and realize how it’s different, and take advantage of it.”

Lerer wouldn’t discuss BuzzFeed’s performance last year, and he wouldn’t talk about the company’s financials in any further detail.

Three people familiar with the company’s financials, but who don’t work at BuzzFeed, say BuzzFeed did indeed miss its 2015 projections, as Digiday reported earlier this year. One source says the company generated $170 million in revenue, missing a goal of $210 million; the FT reported the same revenue number, but said the company’s goal was $250 million.

What may be more consequential than the size of BuzzFeed’s miss is the reason for BuzzFeed’s miss. One theory is that BuzzFeed’s core ad product — “native” stories it writes on behalf of marketers — no longer works as well.

Another theory, favored by people who would like BuzzFeed to succeed, is that last year’s BuzzFeed’s content strategy moved faster than its monetization strategy.

That is: Last year BuzzFeed started focusing on creating content for other people’s platforms — in particular, video that appears on Facebook — but hasn’t been able to make much money from that content, because those platforms are still figuring out their ad models.

A very optimistic take about BuzzFeed’s chances is that the company made a deliberate decision last year to forgo some revenue from its old business as it shifted its focus toward video.

“They purposefully disrupted themselves,” said one BuzzFeed booster.

If that’s too rosy, here’s a more skeptical assessment: “They’re driving in the dark at 60 miles an hour, without headlights,” said one person familiar with the company. “But that’s better than standing still.”

A concrete reason to feel better about BuzzFeed’s future is last week’s announcement from Facebook that encouraged more “branded” videos made on behalf of marketers — one of the areas the company has invested heavily in over the last year. One source says the announcement came after BuzzFeed CEO Jonah Peretti lobbied Facebook to help him make more money from video.

Now Lerer, at least, thinks video will do well for BuzzFeed this year. “It’s a little bit harder to make money in display ads this year than it was last year,” he said. “It’s a lot easier to make money in video this year than it was last year.”

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