There’s been much talk in the media sphere this week about BuzzFeed and its financial health or lack thereof. Among other things, insiders have whispered about layoffs or downsizing—something the industry is particularly sensitive to lately, given Mashable’s recent purge of about 30 staff members—and questions about whether its strategy is working.
The answer to that, of course, depends a lot on what you mean by the term “working.” Does it mean growing your audience? Increasing revenues? Making a profit? All of the above?
The BuzzFeed whispers were triggered by a report in the Financial Times that the company had missed its revenue targets for last year by more than 30%, and that as a result management had “slashed” targets for this year by half. Instead of expecting $500 million in revenue, the company was only looking for $250 million, sources told the financial newspaper.
Ken Lerer, the chairman of BuzzFeed’s board and an early investor in the company (as well as Huffington Post, which BuzzFeed founder Jonah Peretti also helped build) told Re/code that this report was not accurate, however. The company has not changed its targets for this year, he said, and is on track to meet or beat expectations.
In fact, Lerer said, there’s never been a better time for digital media, and BuzzFeed is on top of its game—growing quickly, expanding into new markets, etc. “Anyone who thinks that this isn’t a terrific time to be in digital content is dead wrong,” he 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.”
One of the most difficult things about the current media environment is that both of these viewpoints are arguably true at the same time. In other words, it’s entirely possible that BuzzFeed both missed its revenue targets for last year by a significant amount *and* is still one of the most promising media entities of the digital era.
One potential explanation for BuzzFeed’s miss last year is that the company poured all of its resources into a distributed-content strategy—meaning it focused not just on pushing its stories and videos and listicles out to Facebook and Snapchat and other platforms, but on creating content specifically for those services.
The company has talked about this approach a number of times, including in a feature in Fast Company and a post written by publisher Dao Nguyen, as well as an interview that Jonah Peretti did with Re/code. At this point, a staggering 75% of all the content that BuzzFeed creates never actually appears on its site.
Watch: This is how many documents are in the Panama Papers leak
That has meant a huge increase in what the company calls “content views,” which now total more than 5 billion per month. But the process of bringing in revenue from all of that distributed content doesn’t seem to have kept pace with the growth, since Facebook in particular is still working out how it will make money from video. Will that revenue model be worth the effort? No one knows.
Most traditional media companies continue to get the bulk of their money from advertising on their website, or from subscriptions, or from some combination of those two things. While they may be experimenting with Facebook’s Instant Articles or other features, they haven’t become a big part of the overall picture—at least not like BuzzFeed.
Those traditional media outlets have their own problems, because advertising revenue is meager at best, and subscription revenue doesn’t make up the difference. BuzzFeed’s problem is arguably a function of the company plunging into the future without waiting for the actual landscape to become clear.
A source that Re/code doesn’t name but describes as being “familiar with the company” described the BuzzFeed approach as “driving in the dark at 60 miles an hour with no headlights. But that’s better than standing still.” Even that is probably understating the case—it’s probably going closer to 100 miles an hour.
Sign up for Data Sheet, Fortune‘s technology newsletter.
That may not sound like the best strategy for surviving a car ride, but it’s probably not a bad way to think about what BuzzFeed is trying to do, and what other media companies should arguably be trying to do as well. There may be a huge recalculation going on in the new media business, as industry analyst Ken Doctor argues, and it’s entirely possible that the valuation given to BuzzFeed and others is overdone. But standing still isn’t an option.
Is the company’s strategy of distributing all or most of its content through Facebook and other platforms the best approach? No one really knows. All the media industry knows is that audiences have fragmented and advertising revenue is disappearing, and Facebook is a big part of that process. How much should media companies bet on that continuing? Again, no one knows.
It’s entirely possible that BuzzFeed’s desire to grow at all costs, both in terms of opening offices in other countries and pushing user numbers and content views as high as they will go, will backfire. It’s possible that the game of scale in media is either over or is rapidly going away, as Justin Smith of Bloomberg Media has argued, and that focusing on a specific niche is the only way to succeed, as media entrepreneur Rafat Ali argues.
At the moment, however, all of that is up for grabs. And if we learn anything about any of those questions, it will in part be because companies like BuzzFeed took the bullets for the rest of the industry by heading out in advance of the troops. They aren’t just driving in the dark, they are helping to map the landscape for others.