Automattic (Wordpress) buys Tumblr for "Less Than $3 Million"

Ryuzaki

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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.
 
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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.
Poor Yahoo...online pioneers on the deathbed. Anyone remember Yahoo Messenger?

On Automattic's acquisition of Tumblr, it's a great consolidation move. I'm thinking they'll merge the Tumblrs into free WP blogs and eventually shut down Tumblr.
 

darkzerothree

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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.
Thing is, that weirdo stuff AND the porn is what tumblr was.
Take it out, clean it up and you're left with nothing.
 

Potatoe

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Third hand info from someone who knows someone who was high up at Tumblr kinda thing, grain of salt and all that, but apparently Tumblr just about doubled their revenue when they got rid of the adult stuff. Traffic dropped, but advertising increased. It was the right move, but it was still too late. Imagine having the traffic of Pornhub, but the scrutiny and obligations of Neopets, and then trying to monetize that.

I know a ton of people were also probably like "3m? Shit, we could have made a couple calls and put together a better offer..." but a big part of it was that Automattic was willing to take on Tumblr's obligations and salaries and all that, which I heard comes closer to 45m per year.
 
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Third hand info from someone who knows someone who was high up at Tumblr kinda thing, grain of salt and all that, but apparently Tumblr just about doubled their revenue when they got rid of the adult stuff. Traffic dropped, but advertising increased. It was the right move, but it was still too late. Imagine having the traffic of Pornhub, but the scrutiny and obligations of Neopets, and then trying to monetize that.

I know a ton of people were also probably like "3m? Shit, we could have made a couple calls and put together a better offer..." but a big part of it was that Automattic was willing to take on Tumblr's obligations and salaries and all that, which I heard comes closer to 45m per year.
Make few calls
Put together 3mils
Acquire tumblr.com
Fire everybody
301 tumblr to affiliate site
Pop bubbles

Sorry : had to :wink:
 

secretagentdad

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Make few calls
Put together 3mils
Acquire tumblr.com
Fire everybody
301 tumblr to affiliate site
Pop bubbles

Sorry : had to :wink:
hahahahahah that’s great.

The problem with their biz models is nobody has a solution to how you moderate those sites. Ai doesn’t work and your work force goes insane on you. Some traffic is just hot potato traffic.
 
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Third hand info from someone who knows someone who was high up at Tumblr kinda thing, grain of salt and all that, but apparently Tumblr just about doubled their revenue when they got rid of the adult stuff. Traffic dropped, but advertising increased. It was the right move, but it was still too late. Imagine having the traffic of Pornhub, but the scrutiny and obligations of Neopets, and then trying to monetize that.

I know a ton of people were also probably like "3m? Shit, we could have made a couple calls and put together a better offer..." but a big part of it was that Automattic was willing to take on Tumblr's obligations and salaries and all that, which I heard comes closer to 45m per year.
Not surprised that Tumblr revenues went up significantly. Lots of advertisers hesitant to promote on there. People joke about porn being majority of Tumblr. This might be true from a pure traffic standpoint, but Tumblr is home to a ton of micro-communities. Some ridiculous and weird, but what community driven site doesn't have that? Reddit is pretty notorious for that. But also some very advertiser friendly and awesome ones. I actually really wonder what those economics look like behind the scenes. I believe $45M in yearly costs, but curious how much they get in revenue. Cutting staff a bit and making a more lean engineering team should significantly cut down costs and Tumblr could very well be in position to be break-even.

Very curious actually to see if Automattic made a promise or obligation to keep Tumblr up. $3M is probably peanuts to Automattic. Downside pretty small and upside great if they can get it to work.

But....is it something that they can dabble in for a year and if they can't make it profitable and after they transitioned any benefit they can to their core product, they can just tear down and throw to the side?