Automattic’s bargain-bin Tumblr deal plugs right into the WordPress business model

Tumblr has been an millstone around the neck of its owners, first Yahoo and later Oath and Verizon Media, pretty much since it was acquired in 2013. They never found an answer to the question that new owner Automattic is presumably about to take a crack at: how to make this unruly erstwhile porn factory turn a profit.

Amazingly, the secret technique that Tumblr may have been waiting for was good old-fashioned business sense: make something people want, then charge them a good price for it. Tumblr may fit into the WordPress model and do just this — quite a change from the indirect monetization attempts of the past decade.

The Yahoo acquisition under the stewardship of Marissa Mayer seems to have been made with the assumption, naive in retrospect but incredibly common in that era, that you could buy an audience, plunk some ads in the product, then sit back and let the money roll in.

But beyond doing that, Yahoo never really did anything with Tumblr apart from adding a few features and expanding ads. And for a while growth was good and the network flourished, even rivaling Instagram on some metrics.

But over time Tumblr, and “microblogging” in general, declined as more focused social experiences like Instagram took over, and it prospered in other, less savory ways. Porn grew to become a huge proportion of the content of the site, a large majority by some estimates — but to guess at the amount of porn on Tumblr is like trying to count the waves in the ocean.

After a run-in with Apple last year over allegations of child porn on the platform and its subsequent removal from the App Store, management somewhere in or above Tumblr — founder David Karp had long since left — decided at the end of 2018 to kill off all porn on the platform. The resulting exodus of users, and generally speaking the removal of the internet’s most popular form of content, must have practically decimated the site’s numbers. I don’t think it ever made a dime, but now it was losing money and users.

Hence, after following a long and rather boring path, Tumblr has arrived at the doorstep of WordPress wrapped in a bow. So what now? The answer lies in Tumblr’s original strengths and brand, which years of neglect have only partly tarnished.

Tumbling ideas

In the years since Tumblr was bought, its rivals have taken its best parts and run with them.

Tumblr was a community of communities — Pinterest and Reddit took this over with savvy partnerships and sticky user recruitment.

Tumblr was a simple, visual blog — Instagram completely took over a large part of this space, simplifying and streamlining, while hosts like Imgur appeared like remorae on the social networks, sucking up viral traffic.

Tumblr was a free, customizable home for artists — artists who later left for simple storefronts combined with one of the above platforms, or one more suited to them, like DeviantArt (!).

There are plenty of other ways that Tumblr helped nudge the internet economy forward, but it never evolved itself, an evolutionary dead end that found itself outcompeted in every niche.

Automattic, which reportedly bought the whole shebang for a few million dollars, is actually in a good position here. It is not saddled with a billion-dollar valuation it needs to justify and make back in five years. Automattic is a successful company and a few million bucks — plus all the recurring expenses — likely isn’t going to significantly impact their bottom line in the short run, especially what is likely to be a rather destructive redundancy check.

Leaving aside porn, Tumblr can still arguably be said to be known for its resilient and weird niche communities and a simple, easily created and customized “home on the web.”

WordPress is well known as being a step above these things, focusing on savvier users and businesses who not only don’t mind dealing with plugins and code upkeep, but who are willing to themselves actually pay for the services they use.

And old dog, but the tricks aged well

As a “baby’s first website” Tumblr is a great option, and unlike 7 or 8 years ago, one that WordPress knows how to monetize. Not only that, but people are leaving some of the communities that appeared in Tumblr’s wake as they begin to encroach on privacy and good practices. Etsy sellers, for instance, are being squeezed by the company’s insistence on free shipping. And while Instagram is a great place to advertise, it and Facebook still haven’t figured out the buying-stuff-on-it piece to anyone’s great satisfaction.

It’s not exactly a home run, since personal websites are also very ten years ago. But the migration to larger platforms has proven unsatisfactory: Your data is sucked up and sold, there’s cross-pollination with your personal stuff, the promised capabilities don’t appear, and so on. The pendulum is swinging away from companies like Facebook, Twitter, and Google, which have exhibited little interest in fostering user communities that don’t directly contribute to their primary business cases (where they exist).

Why shouldn’t Automattic snatch up a storied personal publishing website, recently swept of porn, with a good reputation for thriving, self-organized communities? Especially if it already has a business model that works and doesn’t require compromising the basic value proposition of the personal publishing website in question.

WordPress doesn’t make its money by displaying ads on the blogs it hosts, but through ordinary services and skimming a bit here and there from others using the platform to reach customers. Isn’t that a good match for Tumblr, or at least a good enough match to give it a shot? Yahoo’s unimaginative plan didn’t play to Tumblr’s strengths, and in fact may have resulted in exacerbating its weaknesses as engagement metrics were paramount, regardless of whether they were garbage clicks or not.

Tumblr is a relic of an older web, a younger and more naive one, in both good ways and bad. It was ill suited to the economy Yahoo attempted to shoehorn it into, and failed to become anything more than what it started as. But while it was a poor fit for web platforms that attempted to leverage their users as value to third parties, it may yet be a good fit for a company that just wants to charge money for goods and services and has found success doing so.

As a junior WordPress platform that combines personal website with small communities, blogging, and marketplaces, a new Tumblr could be a great match for an increasingly decentralized web economy. Whether Automattic will be able to make good on this particular venture is difficult to say. But one thing is for sure: They have a better chance of making back their purchase price than Yahoo did, and a lot less to lose if they don’t.