Terms of the deal were not disclosed, but the price tag is clearly nowhere near what Yahoo originally paid. Automattic will pay less than $10 million for Tumblr, according to an Axios report citing an anonymous source. Automattic will bring about 200 Tumblr employees on-board with the deal, according to the Wall Street Journal, which first reported the news.
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Verizon, which bought Yahoo in 2017, had been looking to unload Tumblr for months, the Journal previously reported. Tumblr hosts some 475 million blogs currently, with a blend of text, images and video content, but neither Yahoo nor Verizon were ever able to figure out how to make it a significant revenue-generating destination.
Verizon Media (formerly called Oath) in December of last year decided to ban adult content from Tumblr — a last-gasp effort in trying to make it a safer place for advertising and coming a month after Apple removed Tumblr’s app from its App Store after child porn was discovered in the app. The move prompted Tumblr’s traffic to drop by nearly one-third. The site in July 2019 had 381 million total visits, down from 521 million in December 2018, according to analytics firm SimilarWeb.
According to Automattic, it has no plans to reallow porn or other NSFW content on Tumblr.
“Today’s announcement is the culmination of a thoughtful, thorough and strategic process,” Verizon Media CEO Guru Gowrappan said in a statement. He called Tumblr a “marquee brand” that has become “home to many creative communities and fandoms.”
The Tumblr sale comes after Verizon began pruning the Yahoo-AOL portfolio last year. It sold photo-sharing site Flickr to SmugMug and offloaded Moviefone to Helios & Mathenson Analytics, the parent of struggling theater-subscription service MoviePass.
There’s a natural fit between Automattic and Tumblr, which are both aimed at letting individuals and businesses create and manage online communities geared around content. “Tumblr is one of the web’s most iconic brands,” Automattic CEO Matt Mullenweg said in a statement. “It is an essential venue to share new ideas, cultures and experiences, helping millions create and build communities around their shared interests.”
The deal isn’t officially closed, still subject to usual closing conditions. Automattic’s businesses, in addition to WordPress.com, include WooCommerce, Jetpack, Simplenote, and Longreads.
Under Gowrappan, Verzion Media is focusing on news, sports, finance and lifestyle content — as well as utilities like mail — to reach an aggregate base of nearly 1 billion consumers worldwide. Its brands include Yahoo, HuffPost, TechCrunch and AOL. Total Verizon Media revenue in the second quarter of 2019 was $1.8 billion, down 2.9%, as desktop ad sales continue to fall (an improvement over the group’s 7.2% drop in the year-earlier period). Gowrappan took over Verizon Media last fall with the exit of former CEO Tim Armstrong.
Back when Yahoo bought Tumblr, then-CEO Marissa Mayer had seen blogging site, founded by David Karp in 2007, as a potential major source of new revenue growth and a way into the social-media space. But that never panned out and less than three years after buying it, Yahoo took impairment charges totaling $482 million for Tumblr.