Six years after Yahoo bought Tumblr for US$1.1B, their parent company Verizon has decided to divest Tumblr to Automattic, owner of WordPress, for a fraction of the original purchase price. The first publicly quoted price was “well below US$20M” and the official number has since changed to “less than US$3M”. It would seem like then CEO of Yahoo Marissa Mayer’s famous promise to “not screw it up” did not pan out exactly as planned.
Verizon has not exactly been subtle about wanting to sell the large, but consistently unprofitable, blogging platform, but as of May this year the only other interested party seems to have been Pornhub, which due to the ban of pornographic material on Tumblr is somewhat controversial.
The sale will result in Automattic Inc, the owner of WordPress, taking over both the company and its well over 200 employees. Given that Tumblr has been running at a consistent substantial loss it is likely that we will see significant changes to the company in the near future as Automattic seeks to intergrated it into their portfolio and potentially inject it with some stability.
There is little doubt that Tumblr’s last couple of years have been rocky, while it still ranks 77th on Alexa it has seen with a significantly declining user-base. The answer to the question of “What went wrong” probably has as many answers as there are blogs on Tumblr, around 550 million as of today, but a theme that seems to be continuously pop up is that Verizon tried to make Tumblr into a mainstream social media platform. However, Tumblr is anything but mainstream, an example is that some of the biggest overlaps in userbase are with deviantart.com and fandom.com. Yahoo’s plan to recreate Tumblr into a mainstream advertising social media platform was also one of the key drivers of the adult content ban. In 2013 an analysis conducted by TechCrunch showed that over 22% of all traffic to the site was classified as pornographic. But even broader than any one key event the management at Yahoo/Verizon seem to have just fundamentally misunderstood Tumblr userbase and its inherent ability to generate revenue from advertisements.