Verizon to Sell Tumblr to WordPress.com Owner

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Verizon Communications Inc. VZ -0.16% has agreed to sell its blogging website Tumblr to the owner of popular online-publishing tool WordPress.com, unloading for a nominal amount a site that once fetched a purchase price of more than $1 billion.

Automattic Inc. will buy Tumblr for an undisclosed sum and take on about 200 staffers, the companies said. Tumblr is a free service that hosts millions of blogs where users can upload photos, music and art, but it has been dwarfed by Facebook , Reddit and other services.

Verizon became Tumblr’s owner through the carrier’s 2017 acquisition of YahooAABA -0.03% as part of a bid to build a digital media and advertising business. The wireless carrier began seeking a buyer for Tumblr earlier this year, The Wall Street Journal reported.

 

It discussed a potential transaction with a handful of parties, people familiar with the matter said. The sale price isn’t material to Verizon, one of the people said.

Verizon is in the process of revamping its media group, which struggled to meet revenue targets in recent years. The business, home to legacy Yahoo and AOL web properties such as HuffPost, TechCrunch, feminist media brand Makers and celebrity-interview site Build, is increasingly focused on subscription and original content.

The Tumblr acquisition is the largest ever in terms of price and head count for Automattic, the company’s Chief Executive Matt Mullenweg said in an interview. The San Francisco company has a stable of brands focused on online publishing, including longform site Longreads, comment-filtering service Akismet, and avatar-managing service Gravatar.

 

 

Yahoo had paid about $1.1 billion for Tumblr in 2013 when it was one of several fast-growing internet startups. Tumblr failed to generate meaningful revenue for Yahoo, prompting the company to write down the site’s value by $230 million in 2016.

A decision last year by Verizon to ban adult content on Tumblr alienated some users.

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.

Revenue within Verizon Media Group, formerly called Oath, was $1.8 billion in the second quarter, down 2.9% from a year earlier. The company said during its quarterly call with analysts that it remains focused on news, finance, sports, entertainment and mail products within the media business, including new HuffPost and Yahoo finance subscription services.

Verizon last year booked a $4.5 billion accounting charge related to the unit and it has struggled with declining desktop advertising revenue and a digital advertising market dominated by behemoths like Alphabet Inc. ’s Google.

 

 

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

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