Verizon has announced it has sold its blogging platform Tumblr to Automattic.
According to The Wall Street Journal, the sale was valued at a “nominal amount” of around $3 million, despite Tumblr last being valued at $1.1 billion when acquired by Yahoo.
Under the deal, Automattic – the company behind WordPress – will gain 200 new staffers, who will work on turning around the flagging social networking-cum-blogging platform.
According to sources close to the sale, the price of Tumblr was “immaterial” to Verizon, with the company looking to offload some of its assets following its Yahoo acquisition.
The firm had been in talks with a number of partners over a deal, but Automattic came out on top.
Back in 2013, Yahoo purchased Tumblr for an eye-watering $1.1 billion in cash, but little was done to turn the company around or make it more competitive with Twitter, Facebook, and other social networks that have gone on to reach millions – even billions – of daily users.
Four years later, Yahoo was acquired by Verizon in 2017 and placed under its Oath subsidiary, and Tumblr was virtually abandoned.
The company further damaged its value when it announced it was to remove all adult content from the platform, which alienated a large part of Tumblr’s audience and caused its advertising value to plummet further.
Verizon’s media group still includes titles such as TechCrunch, Huffington Post, Engadget, and more, but the company has been struggling to generate a profit from its media arm.
In Q2 2018, Verizon Media Group generated $1.8 billion in revenue, which was down by 2.9 percent year-over-year – a healthy turnover, but not enough to generate a return for the company.
Speaking of the takeover, Automattic’s Chief Executive Matt Mullenweg said of Tumblr: “It’s just fun. We’re not going to change any of that,” but stressed adult content would not return.
Tumblr and Automattic will “look for ways WordPress.com and Tumblr can share services and functionality,” but it’s unlikely we’ll see any significant changes any time soon…
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