Wordpress to buy Tumblr for under $20M

[R0binHood]

https://www.wsj.com/articles/verizon-to-sell-tumblr-to-wordpress-owner-11565640000

Mr. Mullenweg said his company intends to maintain the existing policy that bans adult content. He said he has long been a Tumblr user and sees the site as complementary to WordPress.com. “It’s just fun,” he said of Tumblr. “We’re not going to change any of that.”

Tumblr has a strong mobile interface and dashboard where users follow other blogs, he said. Executives will look for ways WordPress.com and Tumblr can share services and functionality.

What's the primary motivation and end game behind this do you think?

How do you think the integration could work out?

 

[zappaDPJ]

My understanding is that Verison (owner of Yahoo > owner of Tumblr) wants shot of it and practically gave it to Automattic (owner of WordPress ). I think (could be wrong) that Tumblr was once valued and/or sold for $1 billion but was recently almost given away to the owner of WordPress.

Automattic own a lot of well known brands other than WordPress e.g. WooCommerce so I guess the acquisition of Tumblr is simply another acquisition and should not necessarily be linked in anyway to WordPress.

 

[LeadCrow]

Tumbler is basically equivalent to wordpress.com, the social network run by the Automatic. This acquisition should allow both services to strengthen their respective offers.

 

[R0binHood]

My understanding is that Verison (owner of Yahoo > owner of Tumblr) wants shot of it and practically gave it to Automattic (owner of WordPress ). I think (could be wrong) that Tumblr was once valued and/or sold for $1 billion but was recently practically given away to the owner of WordPress.

Automattic own a lot of well known brands other than WordPress e.g. WooCommerce so I guess the acquisition of Tumblr is simply another acquisition and should not necessarily be linked in anyway to WordPress.

I think they should absolutely regarded as being linked.

The owner of Automattic is Matt Mullenweg, a co-founder of the open source wordpress (found at Wordpress.org), but also founder of the for profit company and wordpress contributer Automattic and wordpress hosting platform Wordpress.com among other companies.

Automattic did acquire WooCommerce back in 2015, and does develop that after seing its massive potential, so they have huge influence over the ecommerce side of WP as well as contributing to the core platform. And the ecommerce aspect is as huge selling point of the platform as a whole, even though that aspect is developed and maintained by a private company.

So this is a case of Matt's massive global company (one famous for being the largest remote working company in the world) acquiring yet another massive global brand. Which makes me wonder how they'll use their influence to expand the wordpress core and how they plan on getting a return on their investment in the WP ecosystem, presumable somehow through some kind of truly social endeavour.

WP.org is the open source CMS.
WooCommerce is the highly succesful free to enter, but potentially very expensive to expand and customise ecommerce integration into that which they are able to strongly monetize through a huge ecosystem of very expensive plugins.
Tumblr is the start of their social network expansion within the WP ecosystem?
Get the social users posting way more content than was ever posted as article comments on WP blogs.
Create an even stronger community and forum ecosystem with WP users.
Monetise the heck out of it somehow.
Profit?

 

[zappaDPJ]

You could well be right, I'm sure 'profit' is the bottom line, I'm just not sure if the two products can integrate in any meaningful way.

 

[overcast]

But I don't understand one thing. Tumblr is micro blog infested with activist and some pretty objectionable content. What wordpress would do for it? Monetize?

 

[R0binHood]

I got the figures completely wrong at the start of this thread, late night

It was worth over $1B, but recently sold for under €20M, with some speculating it could be as low as $3M.

So, they picked it up for peanuts in comparison to previous evaluations.

https://arstechnica.com/information...ress-com/?utm_source=share&utm_medium=ios_app

Sounds like the porn ban didn’t help.

 

[LeadCrow]

But I don't understand one thing. Tumblr is micro blog infested with activist and some pretty objectionable content. What wordpress would do for it? Monetize?

Move all tumbler blogs to a tumbler-branded offshoot of wofdpress.com, or migrate them altogether to wordpress.com.
Automattic sells a lot of paid upgrades to hosted blogs and this acquisition has the potential to at least triple their revenue.
Just check their starter prices where individual features are not charged for https://wordpress.com/pricing/

 

[overcast]

Move all tumbler blogs to a tumbler-branded offshoot of wofdpress.com, or migrate them altogether to wordpress.com.
Automattic sells a lot of paid upgrades to hosted blogs and this acquisition has the potential to at least triple their revenue.
Just check their starter prices where individual features are not charged for https://wordpress.com/pricing/

Still I think many tumblr users may not align with that future change of tumblr. I mean before the tumblr sell 1 year before they got rid of adult content, and monetized blogs removed.. I guess with new change this will be just replica of wordpress.com cloud platform.

 

[LeadCrow]

Hardly anything needs to change for tumblr other than the site's code being switched to wordpress.com's, maybe even run its own instance rather than have existing blogs migrated in a merge. 20 millions is peanuts Automattic neednt even bother recouping.

 

[Joel R]

The actual purchase price was significantly less, on the order of $2 to $3 million. It was also the biggest for purchase and team size in the history of Astromattic.

 

[zappaDPJ]

The incredible and swift devaluation of Tumblr seems to highlight the vast potential for making money out of pornography or is there something else behind this acquisition?

 

[overcast]

I am going to assume that once they transition into new system, their rules for blogs would be same as Wordpress . com this way they will have paying customers I guess.

 

[R0binHood]

The actual purchase price was significantly less, on the order of $2 to $3 million. It was also the biggest for purchase and team size in the history of Astromattic.

If that is the case, and 200 employees are moving over, that makes the value seem even smaller. At a conservative average salary of $50k a year that's a $10M per year burn rate on the salarys alone.

So compared to the cost of keeping the company running once they aquire it, for $3M they bought it for the cost of keeping it afloat for a quarter.

As for Tumblr's underlying technology, Mullenweg wrote that "there are some good opportunities to standardize on the Open Source WordPress tech stack, but the front-end user experience on Tumblr will evolve on its own path."

Maybe Verizon just wanted shot of it as it was burning such a hole in their pocket, and Automattic figured that some of the underlying tech they had developed and some of the egineers were worth the investment to intetegrate into the WP ecosystem.

 

[R0binHood]

Just found a great article and interview here.

https://www.theverge.com/2019/8/14/...utomattic-wordpress-verizon-changes-vergecast

Some highlights are, they did want the team:

That was really where we tried to optimize the deal, especially in terms of bringing over close to 200 people. We’re taking them all on. I am aware of some of the details of some of the bidders. You know they were not planning to keep much, if any, of the team going.

We did more of a Berkshire Hathaway approach: we really want to bring over the management team, take what was working well, which is Tumblr’s engagement, and grow from there.

The company is currently burning a lot of money and they want to look at ads and premium membersships

Advertising is definitely something we’re going to explore. We do definitely want to grow Tumblr’s revenue. Right now, they’re burning a lot of money. But long-term, I would say I’m also super interested in experimenting with upgrades. WordPress.com has always been an upgrade-centric model. It’s freemium: use it for free, and then you can buy plans anywhere from $40 to $450 per year to get added functionality. I’m curious about turning on things like some of the e-commerce functionality we’ve been developing with Woocommerce, memberships, those things I think would be very, very interesting to the Tumblr community. So there’s just so much to unlock there.

Native apps are going to be massively important for it, because web version only just doesn't cut it.

This causes a big issue with regards bringing any porn back, so its up to users to put pressure on app stores if they want the porn.

And some people say, “Well, do you need to be in the app store? Just have a web version.” But apps really are it, and I believe Tumblr is one of the top 30 or 40 apps in the social networking category. It’s usually top couple hundred globally. So their app is a big part of how people interact with it.

And I don’t know if you’ve ever been through an app review process; we’ve even run into this on WordPress. They’ll search for porn. It’s not like it needs to be on the homepage or on the sign-up. They really look for it. And if they find something, you can be taken down.

They do want to convert it into some type of social network, but with the ability to pull in external content from the open web. Especially after Facebook shut down their posting APIs a few years ago.

How may they do that? Dun dun dunnn.....RSS! Yes, going old school again. RSS lives and they see the value for pulling relevant content into your community from RSS sources.

The primary user experience is going to be that social network. But there’s no reason that VIP or really high-end users of WordPress can’t tap into that social network and a really native beautiful integration.

One of the things that Facebook did after Cambridge Analytica is they actually removed all their posting APIs. So you used to be able to post to WordPress and we would auto-post to Tumblr, Twitter, LinkedIn, Facebook, etc., and they turned off those API is after Cambridge Analytica. No one really objected or talked about it too much, but effectively, they turned off the part that allowed you to put external content into the Facebook News Feed and everything.

That was actually a big change in how the open web worked because previously all of the social networks had had some sort of way to get things in and out. Tumblr for example used to have RSS feeds so you could follow things that weren’t actually hosted on Tumblr. I would love to bring features like that back because I would love for Tumblr to be a better part of the open web.

In summary and on integrating with wordpress

I think there’s a lot of overlap in what both do. I would love for them to interoperate. I do believe that, long-term, there’s an opportunity to merge backend technology so that Tumblr is actually powered by WordPress. WordPress, we think of as the open web operating system. It powers 34 percent of web sites now. It should be able to power everything that Tumblr does, but what I would call the Tumblr app, the user experience, the dashboard, that will always be its own unique thing and evolve in its own way because it is something distinct from everything else on the web. That’s what I think is the most interesting thing about Tumblr: it’s a unique, iconic brand that I’m looking forward to being around for decades to come. It has something that’s just a bit different.

It’s funny because almost every social network evolved to incorporate forms of blogging. There was microblogging, photo blogging, audio blogging, which is podcasting. These are all kind of forms of things that were originally pioneered on blogging. Yet all of these things have become so balkanized. I think it’s very, very interesting to see if you can bring them together a bit, as Tumblr post formats do.

What kind of experience people can create for themselves and really make it something where they choose what they follow? They’re not just being algorithmically pushed whatever is the most incendiary thing that might be in their feed.

There's some other good bits in the full artcle. Sounds to me like it was a good oppurtunity for them to buy their way into an established platform as a starting point to create yet another social community network increasing the competition to self hosted forums, they want to make it easy for users to pull in and share content from the open web, and they're going to put massive focus on mobile and premium memberships, similar to reddit.

 

[Alpha1]

This sounds promising. Combining tumbler with wordpress, woocommerce, apps, ads, subscriptions.

 

[cheat_master30]

Well Automattic has more experience running a blog hosting platform than Verizon did, so it's likely they'll do better in at least some sense there. And there's definitely some potential there if they use it as a springboard for a bigger blog based social network with a WordPress core. After all, they're apparently talking about moving Tumblr to WordPress in some capacity, and if they somehow tied it into Jetpack or whatever, they could even bring self hosted WordPress installs into the 'network'.

 

[MagicalAzareal]

The incredible and swift devaluation of Tumblr seems to highlight the vast potential for making money out of pornography or is there something else behind this acquisition?

Pornography is worth a looot of money and is pretty much the main reason Tumblr has any value.

This causes a big issue with regards bringing any porn back, so its up to users to put pressure on app stores if they want the porn.

Apple really doesn't care and neither does Google. This is really why the whole idea of an "app store" is a terrible one, you can be screwed over at any given moment without any recourse, just the hope that your benevolent overlord will do precisely what you want.

 

[overcast]

Move all tumbler blogs to a tumbler-branded offshoot of wofdpress.com, or migrate them altogether to wordpress.com.
Automattic sells a lot of paid upgrades to hosted blogs and this acquisition has the potential to at least triple their revenue.
Just check their starter prices where individual features are not charged for https://wordpress.com/pricing/

So technically this will be umbrella of wordpress.com and they are just making use of the tumblr domain. Rest of the stack which was made by previous company is not usable for them it seems.

 

[R0binHood]

Salesforce have just injected $300M into Automattic.

https://opensource-it.com/will-automattic-and-wordpress-will-now-eat-acquia-and-drupal/

Interesting move. They must have a lot of money to burn from their high pro and enterprise prices.