Verizon Communications Inc. agreed to sell the blogging platform Tumblr to Automattic Inc., the latest sign the wireless giant is dismantling its online empire.
Terms of the transaction weren’t material, Verizon said, suggesting Tumblr sold for a tiny fraction of the $1.1 billion it fetched in 2013. A report by Axios put the price at “well below” $20 million. Verizon acquired the site as part of its 2017 purchase of Yahoo.
Automattic already owns a group of publishing sites, including WordPress.com and Longreads, and sees Tumblr as a good fit. The Wall Street Journal previously reported on the sale, saying that Automattic would take on about 200 staffers.
For Verizon, the sale marks a further retrenchment. It has been cutting staff at its online media division, which was previously called Oath.
“Today’s announcement is the culmination of a thoughtful, thorough and strategic process,” Guru Gowrappan, Verizon Media’s chief executive, said in a statement Monday.
Verizon had originally set out to turn a patchwork of dot-com brands into a thriving online-advertising business, but the strategy never caught fire. And the carrier’s new CEO is refocusing on what the company does best: wireless service.
Last year, it wrote down the online business by $4.6 billion. That erased almost half the value of the entity, which is also home to AOL and the Huffington Post.
Tumblr was founded in 2007 and gained popularity with teens and young adults. By the time Yahoo bought it in 2013, it had grown to more than 100 million users and was something of an open frontier for content, from pornography to poetry — but its revenue stream was far from robust. Founder David Karp had hesitated to run conventional online ads, telling the Los Angeles Times in 2010 that he was “pretty opposed to advertising. It really turns our stomachs.”
Under Yahoo, even as ad revenue rose and the user base grew, the platform struggled to make money. In recent years, users have complained that not enough has been done to limit hateful posts or swarms of porn bots.
Then, in December, Tumblr enacted a ban on adult content. Its algorithm created chaos, flagging posts and entire blogs that didn’t appear to run afoul of the new guidelines. Users fled.
Automattic CEO Matt Mullenweg told the Wall Street Journal that the adult-content ban will stay in place.
Moritz writes for Bloomberg.