Verizon sells Tumblr to WordPress parent, Automattic, for allegedly less than $3million, a fraction of its acquisition cost

Yesterday, Tumblr Staff announced to its users that Automattic, the company that owns WordPress.com, plans to acquire Tumblr. Though the official post does not mention any details, it has been reported that Verizon sold Tumblr for less than $3 million. Automattic will also absorb 200 of Verizon’s employees, however other details of the deal remain undisclosed.

The official blog post states, “We couldn’t be more excited to be joining a team that has a similar mission. Many of you know WordPress.com, Automattic’s flagship product. WordPress.com and Tumblr were both early pioneers among blogging platforms.”

https://twitter.com/jeffdonof/status/1161034494465519620

Launched in 2007, Tumblr is a microblogging and social networking website which allows users to upload and share photos, music, art and post short blogs. It hosts more than 450 million blogs and was earlier considered as one of the major players among social media platforms.

In 2013, Yahoo acquired Tumblr, for $1.1 billion when the company was one of the leading social media platforms. Due to poor returns from Tumblr, Yahoo downgraded its value to $230 million and in 2017, Verizon undertook it as part of its Yahoo acquisition.

In December 2018, Verizon announced its new policy to ban all adult content on Tumblr. This new policy came days after Tumblr was removed from Apple’s iOS App Store over a child pornography incident. The new policy made many users infuriated, leading to further decline in its user count. Two months ago, it was reported that Verizon was keen to sell Tumblr, in order to compensate for its unattainable revenue targets. Automattic acquiring the company is seen as a good sign by many, as WordPress.com is one of the most popular open source blogging platforms.

Although, Tumblr has suffered from inconsistent ownerships all along, it does have a loyal user base. Automattic’s Chief Executive Officer, Matt Mullenweg believes that the new ownership and investment will make Tumblr blossom. “I was very impressed with the engagement and activity Tumblr has continued to have,” he said on Hacker News.

In an interview with Wall Street Journal, Mullenweg says this is the biggest acquisition for the company in terms of price and headcount and mentions that Tumblr will act as as a “complementary” site to WordPress.

Although Automattic enables adult content on its own platform, Mullenweg has said that Automattic will continue with Verizon’s policy of no adult content on Tumblr, “Adult content is not our forte either, and it creates a huge number of potential issues with app stores, payment providers, trust and safety.”

https://twitter.com/photomatt/status/1161049101741494273

Many users are annoyed with Automattic’s decision to not support adult content on Tumblr.

https://twitter.com/countchrisdo/status/1161136251631734784

Another user tweeted that Twitter and Reddit both allow adult content, so Automattic should show some care for the people affected by the ban. He added, “No one wants the NSFW ban to stay, but I guess you're fine with it as long as it lines your pockets.”

Another user says, “I'm curious why you would choose to maintain Verizon's policy changes that alienated the majority of the user-base.”

Many users are, however, happy that Tumblr has finally found a stable host in Automattic.

https://twitter.com/marcoarment/status/1161015149563645953

https://twitter.com/fraying/status/1161020130966437888

https://twitter.com/onalark/status/1161020459980222464

Some feel that Tumblr is a dead company and Automattics’ $3 million is down the drain.

https://twitter.com/shiruken/status/1161058926936449025

https://twitter.com/1amnerd/status/1161208412752863233

A user on Hacker News comments, “Surprised by this news. Tumblr has lost a ton of momentum since its policy change, and the site itself doesn't have a very strong "brand" audience attached to it.”