Wordpress to buy Tumblr for under $20M

Discussion in 'Wordpress' started by R0binHood, Aug 12, 2019.

  1. R0binHood

    R0binHood Habitué

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

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

    How do you think the integration could work out?
     
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  2. zappaDPJ

    zappaDPJ Administrator

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    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.
     
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  3. LeadCrow

    LeadCrow Apocalypse Admin

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    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.
     
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  4. R0binHood

    R0binHood Habitué

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    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?
     
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  5. zappaDPJ

    zappaDPJ Administrator

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    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.
     
  6. overcast

    overcast Adherent

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    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?
     
  7. R0binHood

    R0binHood Habitué

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  8. LeadCrow

    LeadCrow Apocalypse Admin

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    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/
     
  9. overcast

    overcast Adherent

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    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.
     
  10. LeadCrow

    LeadCrow Apocalypse Admin

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    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.
     
  11. Joel R

    Joel R Fan

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    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.
     
  12. zappaDPJ

    zappaDPJ Administrator

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    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?
     
  13. overcast

    overcast Adherent

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    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.
     
  14. R0binHood

    R0binHood Habitué

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    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.

    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.
     
  15. R0binHood

    R0binHood Habitué

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    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:

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

    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.

    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.

    In summary and on integrating with wordpress

    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.
     
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  16. Alfa1

    Alfa1 Administrator

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    This sounds promising. Combining tumbler with wordpress, woocommerce, apps, ads, subscriptions.
     
  17. cheat_master30

    cheat_master30 Moderator

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    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'.
     
  18. MagicalAzareal

    MagicalAzareal Magical Developer

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

    overcast Adherent

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    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.
     
  20. R0binHood

    R0binHood Habitué

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    Last edited: Sep 21, 2019
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