Peretti expects the platform to be at least on par with some smaller social media platforms, when it comes to growth. And he sees a future in which BF Island’s business grows faster than BuzzFeed’s publishing side. (Axios reported in February that BuzzFeed plans to offer a freemium model for BF Island, where some features are free and others need a paid subscription.)

“We are modeling monetizing it in ARPU [average revenue per user] in the low double digits per year, approximately 50% of Snap, Pinterest and other small social media services… We would expect to produce positive EBITDA in the first full year, post-monetization,” Peretti said on the call. “We are also building social and viral distribution into the platform to drive growth, which we believe could outpace the growth of our publishing business.”

Peretti said the $10 million investment will primarily go towards engineering. “This is the efficiency that AI can bring,” he said.

He added, “The development of BuzzFeed Island is only possible because of the increased efficiencies we found in our core publishing business, allowing us to reallocate resources with minimal additional hiring. AI assisted software development and productivity tools for our team will enable us to do more while still achieving significant cost savings relative to 2024.”

To put that $10 million number into context, let’s look at what it cost to launch other social platforms, based on data from Tracxn, which tracks startups and their funding.

Bluesky: $8.8 million in a seed round in September 2022.

Discord: $8.2 million in Series A funding round in November 2013. (About $11 million today when adjusted for inflation)

Snapchat: $485,000 in a seed funding round in April 2012 (About $674,000 today when adjusted for inflation), followed by a $15 million Series A funding round in December 2012.

Pinterest: $700,000 in a seed round in December 2010, followed by $10 million in a Series A funding round in September 2011. (About $1 million today when adjusted for inflation)

Flipboard: $10.5 million in a Series A funding round in July 2010. (About $15 million today when adjusted for inflation)

Instagram: $50,000 in a seed round in March 2010, followed by $7 million in a Series A funding round in February 2011. (About $73,000 today when adjusted for inflation)

Twitter: $100,000 in a Series A funding round in July 2007 (followed by a $22 million Series B funding round in May 2008). (About $153,000 today when adjusted for inflation)

YouTube: $3.5 million in a Series A funding round in November 2005. (About $5.7 million today when adjusted for inflation)

Reddit: $100,000 in a seed round in January 2005 (about $163,000 today when adjusted for inflation), followed by a Series B funding round of $50 million in October 2014.

Facebook: $500,000 angel investment in August 2004 (about $844,000 today when adjusted for inflation), followed by a seed round of $6.8 million in May 2005 and a $12.7 million Series A round four months later.

LinkedIn: $4.7 million in a Series A funding round in November 2003. (About $8 million today when adjusted for inflation)

Sam Thompson, senior managing director at M&A advisory firm Progress Partners, noted that this doesn’t mean BuzzFeed has $10 million of cash sitting around. Peretti is talking about moving existing company resources around and adding up the amount of time spent on building the project, which would equate to roughly $10 million.

BuzzFeed did not immediately respond to requests for comment.

Regardless, the resources being put into BF Island “show dedication to this effort at a significant scale,” Thompson said.

At the end of the day, that number doesn’t really matter though, he said. “If I was an investor looking into this business, I don’t care how much [Peretti’s] spent on this. I care about how it’s performing.”

That remains to be seen. Jeff Jarvis, media critic and journalism professor, praised Peretti’s vision for the new platform. “The legacy media is all caught up still in trying to replicate what they have had in the past… I don’t think that you see a lot of innovation and investment going on there,” he said.