- Sep 3, 2014
Automattic Inc. has acquired Tumblr for what the Wall Street Journal is reporting as "well below $10 million, but undisclosed."
You'll probably remember when Yahoo bought Tumblr for $1.1 billion, then Verizon acquired Yahoo and the value of Tumblr was written down by $230 million.
You'll probably remember recently when Tumblr axed all their "adult" content because it was a nesting ground for illegal content featuring minors. Then their traffic straight tanked because most of it was adult content in general. That'd be my guess as to why it sold for such a low fee.
To make matters worse, Dan Primack, business editor of Axios says the sale price was actually LESS THAN $3 MILLION!
The original Tumblr owners are probably having a good laugh at this. They went from 1.1 BILLION to less that 3 MILLION. Pure insanity.
So you may be wondering why Wordpress would be purchasing this. The official word is that they'll be tying the services and functionality together between Wordpress.com and Tumblr.com.
My guess is... Wordpress.com has a fairly robust advertising ecosystem going. By opening that up to Tumblr's remaining traffic, they'll make their money back very quickly, then it's profit-city.
I also suspect Tumblr is going to get "cleaned up" of other types of content too. It's a breeding ground for extreme weirdo stuff, if you're unaware. Stuff I won't even attempt to describe out of respect for not having it posted at BuSo.
Pretty interesting development here. It'll be fun to see how it plays out in the coming years. If it goes like I'm thinking, it's a huge lesson to be learned by the rest of us (that we already know). Acquire under-utilized, under-monetized properties and roll out your own monetization to it and laugh your way to the bank.