Photo: Thomas White/Reuters
Keep It Brief
Verizon Communications Inc. has agreed to sell its blogging website Tumblr to the owner of popular online-publishing tool WordPress.com, unloading for a nominal amount a site that once fetched a purchase price of more than $1 billion.
Details
Automattic Inc. will buy Tumblr for an undisclosed sum and take on about 200 staffers, the companies said. Tumblr is a free service that hosts millions of blogs where users can upload photos, music and art, but it has been dwarfed by Facebook , Reddit and other services.
Verizon became Tumblr’s owner through the carrier’s 2017 acquisition of Yahoo as part of a bid to build a digital media and advertising business. The wireless carrier began seeking a buyer for Tumblr earlier this year.
The Reason
Verizon is in the process of revamping its media group, which struggled to meet revenue targets in recent years. Revenue within Verizon Media Group, formerly called Oath, was $1.8 billion in the second quarter, down 2.9% from a year earlier.
The Tumblr acquisition is the largest ever in terms of price and head count for Automattic, the company’s Chief Executive Matt Mullenweg said in an interview. He said he has long been a Tumblr user and sees the site as complementary to WordPress.com.
Tumblr has a strong mobile interface and dashboard where users follow other blogs. Executives will look for ways WordPress.com and Tumblr can share services and functionality.
The Poor Tumblr
Yahoo had paid about $1.1 billion for Tumblr in 2013 when it was one of several fast-growing internet startups. Tumblr failed to generate meaningful revenue for Yahoo, prompting the company to write down the site’s value by $230 million in 2016.
Now it’s on sale again.
Source: WSJ
The Serious K 