Declining Publisher Traffic Influences M&A Market
The introduction of artificial intelligence (AI) tools has led to a noticeable decline in traffic for many publishers, significantly affecting their audience engagement and advertising revenue. This decline is not merely an operational challenge; it is also reshaping the landscape of media mergers and acquisitions (M&A). Investors and analysts are observing that the current state of disruption is complicating the pricing of potential deals.
Amir Malik, managing director at advisory firm Alvarez and Marsal, emphasized that the unpredictable nature of the market makes it challenging to determine which companies will emerge as winners or losers. He stated, “You can’t buy a business easily in this state of disruption.”
Despite these challenges, there are signs of life in the M&A market. After a notably poor performance in 2023, some recovery was observed in the latter part of the year. Sam Thompson, senior director at M&A advisory firm Progress Partners, noted that U.S. venture capital deal activity in the publishing sector, which had started slowly, began to pick up momentum.
Data from PitchBook indicates that while there were only seven deals in Q1 2025, this number rose to 14 by Q3 2025. Overall, there were 32 VC deals in the publishing sector from Q1 to Q3 2025, compared to 37 in the same timeframe in 2024. Notably, the total deal size increased to $353.9 million in 2025, up from $291.4 million the previous year. A significant transaction this October saw Paramount Skydance acquiring Bari Weiss’s digital media company, The Free Press, for $150 million.
However, the second quarter of 2025 was notably quiet, with only 11 deals totaling $2.2 million, a stark contrast to 13 deals worth $29 million in Q2 2024. The impact of AI on publisher traffic is evident, with many companies reporting declines of 15% to 40% in referral traffic. For instance, Forbes noted a 40% drop in search referral traffic year-over-year.
Malik pointed out that the introduction of AI-driven summaries in search results has led to a significant decrease in traffic for many publishers, complicating their appeal to potential acquirers. He stated, “Deals are being paused because of AI Overviews.” Publishers are now facing pressure to adapt quickly to a changing landscape, which could lead to lower valuations.
Andrew Perlman, co-founder and CEO of Recurrent Ventures, highlighted that investors are currently cautious, often making lower offers due to the unstable traffic situation. He described the market as feeling “stuck,” but noted a slight uptick in interest from buyers. “People are now starting to wake up,” he remarked, indicating that sellers may be more willing to negotiate rationally.
While some publishers may find this an opportune moment to sell, they should temper their expectations regarding valuations. The inflated prices of previous years, such as the $525 million acquisition of Axios by Cox Enterprises, are unlikely to be replicated in the current market.
AI has fundamentally altered the M&A landscape, and while the economy has faced instability, the influence of AI has exacerbated these challenges. PitchBook’s data indicates that most VC activity this year has centered around newsletter-focused media businesses and emerging tech media organizations.
Despite the difficulties, publishers are actively seeking to diversify their revenue streams beyond traditional search traffic. Initiatives focusing on subscriptions and first-party data are being emphasized, as companies like Yahoo and Morning Brew launch creator-led programs to attract talent and generate content.
Analysts believe the M&A market is slowly reviving after a period of stagnation. Malik suggested that companies looking to restructure could drive transactions, while Yee expressed optimism that the market might see larger deals in the coming year. However, Malik cautioned that many publishers might be forced to undergo restructuring, indicating a challenging future ahead.
In summary, while the M&A landscape is evolving, publishers must adapt to the new realities shaped by AI and shifting consumer behaviors. The future remains uncertain, but proactive strategies may help companies navigate these changes effectively.