Verizon is selling HuffPost online news service to BuzzFeed Inc. as part of a larger media content and advertising partnership.
As per the deal, Verizon (VZ) Media will also invest in BuzzFeed and become a minority shareholder. Financial terms of the deal weren’t disclosed. As part of the partnership, Verizon Media and BuzzFeed agreed to syndicate content across each other’s platforms, explore monetization opportunities, and leverage ad formats.
“Verizon Media’s strategy has evolved over the past two years to focus on our core strengths- ads, commerce, content and subscriptions,” said Verizon Media CEO Guru Gowrappan. “We’ve created a powerhouse ecosystem, built on a trusted network, that delivers an end-to-end experience for consumers and advertisers. The partnership with BuzzFeed complements our roadmap while also accelerating our transformation and growth.”
Furthermore, HuffPost will continue to contribute to Verizon Media’s portfolio as an official publishing partner, joining premium content partners such as The New York Times, USA Today, Associated Press, and Reuters. Meanwhile, BuzzFeed will be able to syndicate content across Verizon’s Media brands, including Yahoo. Additionally, Verizon Media will continue to manage sales for HuffPost’s ad inventory.
Shares in VZ are trading down 2.2% year-to-date, and the stock scores a cautiously optimistic Moderate Buy Street consensus. That’s with analysts split between 7 Hold ratings and 4 Buy ratings. The average price target of $62.44 indicates 4% upside potential lies ahead over the coming year.
Tigress Financial analyst Ivan Feinseth this month reiterated a Hold rating on the stock as the analyst views the shares as fully valued in the near-term.
“VZ has realigned its operating structure to better highlight growth drivers and opportunities,” Feinseth wrote in a note to investors. “VZ continues to see strong wireless and advertising trends. Increasing wireless and advertising revenue could start driving an acceleration in Business Performance trends later next year.” (See Verizon stock analysis on TipRanks).
“We continue to view opportunities in 5G and online content delivery along with dividend yield as the potential to create an attractive long-term investment opportunity,” the analyst summed up.
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