Ziff Davis and Univision are the last two companies in the running to buy digital publisher Gawker — which was forced into bankruptcy in June. After submitting bids Monday the winner is expected to be announced by Tuesday night.
Other digital media brands and investors are watching to see how much the company sells for, as the final price may help them determine what their own businesses are worth.
Establishing that value can be difficult for digital media brands — from BuzzFeed and Vice to Vox and Mashable — since an overall figure is calculated not just by their advertising revenue, but also by their traffic, which comes in large part from Facebook and other social channels.
That means Facebook has a huge amount of power. At the end of June, the social network announced changes to its news feed algorithm so users see fewer posts from publishers and brands and more from friends and family.
More recently, Facebook said it would crack down on publishers who post "click bait." The goal is to improve the experience for users, and to encourage publishers to create content that users really want to see.
Likely impacted by Facebook's changes, publishers' organic reach per post on Facebook (rather than their paid reach through ads) dropped by half from January to mid-July this year, according to research firm SocialFlow.
The Huffington Post said it hasn't seen any change in referral traffic from Facebook since the algorithm change, though its traffic from social varies month to month, from about 20 percent to about 60 percent.
BuzzFeed boasts that about 75 percent of its traffic comes from social sources and it's drawing 7 billion content views monthly, more than 70 percent of that on mobile. But a SimilarWeb study of BuzzFeed's desktop traffic finds the site suffered a 6 percent decrease in Facebook visits from Q1 to Q2. BuzzFeed says its content is designed to be shared by friends, which means the success of its articles and videos won't be hampered by algorithm changes, which target content publishers share directly.
IAC's The Daily Beast has been working to reduce its reliance on social traffic, and has grown its "direct" traffic to more than 40 percent, double the percentage from three years ago.
"If you're over reliant on some other platform, you don't own your audience, you're renting," said The Daily Beast's publisher, Mike Dyer, of Facebook's power over publishers.
"I think publishers have relied on social platforms, search and anything else that's come along to increase their traffic … I think we have a whole generation of publishers who have chosen the sugar high of quick scale and quick audience ramping, not the hard work of building strong consumer brands," Dyer said. "When you chose to take as much traffic as you can from social you're giving up some of your distinct voice."
It's worth noting that Gawker derived just about 10 percent of its traffic last quarter from Facebook. It's not much, but it is down by 25 percent from its Facebook traffic in the prior quarter.