Verizon is set to sell the social network Tumblr to Automattic Inc, the owner of online publishing tool Wordpress. A source familiar with the deal puts the price-tag "well below" $20 million, while another source puts it below $10 million.

The big picture: Tumblr, while unprofitable, hosts more than 450 million blogs and was once considered a major player in the social media space. The network was acquired by Yahoo for $1.1 billion in 2013, before moving under Verizon's umbrella through the carrier's acquisition of Yahoo in 2017. Verizon's desire to sell Tumblr had been previously known, but as of May, Pornhub had been the only bidder to show public interest. </s> Verizon Communications agreed to sell the blogging platform Tumblr to Automattic in 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. Verizon acquired the site as part of its 2017 purchase of Yahoo.

Automattic already owns a group of publishing sites, including WordPress 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 officer, 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. </s> Verizon Communications Inc said on Monday it would sell its blogging website Tumblr to Automattic Inc, the owner of popular online-publishing tool WordPress.com.

The company did not disclose the terms of the deal.

Verizon Media Group, formerly called Oath, is the digital media umbrella that owns more than 50 brands, including HuffPost, TechCrunch and Tumblr.

Tumblr was acquired by Yahoo for more than US$1 billion in 2013 and Verizon acquired it as part of its deal for Yahoo in 2015. </s> Verizon Communications Inc. 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 Yahoo 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.

Corrections & Amplifications Automattic Inc. is the owner of WordPress.com, a service that uses the free WordPress publishing tool to host websites. An earlier version of this article incorrectly referred to it as the owner of WordPress. (Aug. 12, 2019) </s> Verizon Communications Inc. (NYSE: VZ) reached an agreement to sell Tumblr to WordPress.com owner Automattic for a "nominal amount," The Wall Street Journal reported.

Verizon acquired Tumblr as part of its 2017 acquisition of Yahoo's media properties to build its own digital and advertising presence. Verizon is now exploring ways to improve its media business, which has consistently fell short of expectations.

Tumblr hosts millions of blogs and was once worth more than $1 billion. The price tag on the asset sale is not material to Verizon, a source told WSJ. On the other hand, Automattic's purchase marks its largest ever in terms of both price and employees it will absorb.

Verizon last year was hit with a $4.5 billion accounting charge related to its digital business unit. In addition, total revenue within the media group fell 2.9% in the most recent second quarter year-over-year to $1.8 billion.

The poor performance prompted management to say during the second-quarter conference call it remains dedicated to news, finance, sports, entertainment and mail platforms within the media business, WSJ wrote. The remaining properties include highly visible properties like HuffPost, Yahoo Finance and other subscription services.

Automattic will look for ways to leverage WordPress.com and Tumblr to combine services and functionality.

This May Explain Why Verizon Wants To Buy Yahoo's Properties </s> Verizon has revealed it is selling social network Tumblr to Automattic Inc, the owner of Wordpress.

Terms of the deal were not disclosed, but reports say Tumblr has been bought for far less from the $1.1 billion Yahoo paid for it back in 2013.

Tumblr later became part of the Verizon stable after its acquisition of Yahoo in 2017, with today's sale marks a major drop in value, with some reports putting the deal at as little as $3 million.
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Automattic will doubtlessly see Tumblr as a key part in its bid to strengthen its online operations. Although the site is unlikely to be profitable in the short term, Tumblr still hosts over 450 million blogs, meaning it remains one of the web's largest such sites.

“Tumblr is a marquee brand that has started movements, allowed for true identities to blossom and become home to many creative communities and fandoms,” Verizon Media CEO Guru Gowrappan said.

“We are proud of what the team has accomplished and are happy to have found the perfect partner in Automattic, whose expertise and track record will unlock new and exciting possibilities for Tumblr and its users.”

Verizon had been keen to sell on Tumblr for some time, but adult site Pornhub had been the only declared bidder until Automattic showed its interest. Ironically, Tumblr suffered a major backlash last year after Verizon announced it would be banning adult content from the site, leading many users to boycott the site.

Automattic says it has no plans to reverse this ban, and that Tumblr will act as a "complementary" site to WordPress.

Automattic will take on Tumblr's 200-odd employee workforce under the deal. The company say it currently employs 940 staff across 71 countries, with WooCommerce, Jetpack, Simplenote and Longreads among its other entities.
• The best web hosting services for your website </s> VERIZON IS FLOGGING social network Tumblr to Automattic Inc, the owner of online publishing tool WordPress.

Verizon has agreed to sell the service for less than $3m, a tiny fraction of the $1.1bn that Yahoo paid for the social network back in 2013.

"I'm delighted to share that Automattic is acquiring Tumblr," Automattic CEO Matt Mullenweg wrote in a blog post.

"Our teams are hard at work right now to make this transition smooth for everyone at Tumblr, and while we have many details to iron out, one thing we're absolutely committed to is to preserve the passion and sense of community that so many people around the world - and all over the web - have come to associate with Tumblr," he added.

In a statement, Verizon described Automattic as "the perfect partner" and said that the new deal was "the culmination of a thoughtful, thorough and strategic process".

Automattic's lineup already includes WordPress.com, Jetpack, Simplenote, WooCommerce, Longreads, and more.

The terms of the deal have not been disclosed, but according to the Wall Street Journal, Automattic will "take on about 200 staffers" from Verizon at the same time.

Tumblr was founded by David Karp in 2007 as one of the first microblogging services. In 2013, the service was acquired by Yahoo for an astonishing $1.1bn, despite no visible path to profitability.

Tumblr had just $16.6m in cash when it was purchased by Yahoo. The service came under Verizon's Oath subsidiary when it bought Yahoo in 2017.

In December last year, Tumblr took a hit when Verizon announced its decision to ban all got content on the platform, which had comprised the greater part of the platform. The move followed a temporary ban on Tumblr from Apple's App Store, which discovered content depicting child sexual abuse on the network.

A large number of Tumblr users criticised Verizon for banning all types of adult content on Tumblr, forcing them off of the site.

Tumblr's CEO Jeff D'Onofrio, said that in the longer term, the decision will help turn Tumblr into a platform where more people would "feel comfortable expressing themselves".

Automattic, which allows adult content on the WordPress.com platform, said it has no plans to undo the ban on adult content on Tumblr, in general.

Following the deal, Tumblr has become the second major Yahoo property spun-out of Verizon. In April 2018, Verizon sold photo-sharing service Flickr to SmugMug. </s> 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.

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“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.”

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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. </s> Verizon Communications Inc. VZ recently inked an agreement to divest the social media blogging site Tumblr for an undisclosed amount. The blogging platform is being sold to San Francisco-based web developer firm Automattic Inc., which is the parent of publishing site WordPress.com, WooCommerce, Jetpack, Simplenote, Longreads, and more. 

 



Although the selling price was not officially revealed, various unconfirmed reports have valued the transaction at about $20 million, which is less than 20% of its original buyout price. In 2013, Tumblr was acquired by Yahoo for $1.1 billion, when it was at the peak of its business. Later, this iconic brand became part of Verizon, when the telecom major acquired Yahoo for $4.8 billion in 2017.With the gradual emergence of social media sites like Facebook, Inc. FB , Twitter, Inc. TWTR , Reddit and Instagram, Tumblr lost its relevance among netizens, leading to mass exodus of users. The once-dominating blogging platform that boasts more than 475 million independent blogs was up for sale as Verizon Media, of which it was part of, conducted a strategic evaluation to focus on core assets that centered on premium original content.Tumblr is a strategic fit for Automattic with similar operating businesses in the form of WordPress.com, one of the most popular publishing tools in the Internet, along with Jetpack and Simplenote. Notably, WordPress.com, Automattic's flagship product, and Tumblr are considered to be the pioneers in blogging platform and share common vision and interests. As part of the deal, Automattic will likely absorb 200 Tumblr employees.Verizon is increasingly focusing on video streaming content. The company has collaborated with industry-leading web-based video playback services providers - THEO Technologies and IRIS.TV - to deliver new mobile video services with advertising functionality and monetize video content. The AI-powered programming platform will use machine learning techniques to generate unique insights about audience behavior while retaining viewers through personalized touch.We remain impressed with the healthy growth prospects of this Zacks Rank #2 (Buy) stock. Another top-ranked stock in the industry is United States Cellular Corporation USM , carrying a Zacks Rank #2. You can seeUnited States Cellular delivered average positive earnings surprise of 38.3% in the trailing four quarters, beating estimates thrice.It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Verizon agrees to sell the social networking site Tumblr to Automattic, owner of WordPress.com, for less than $10 million, less than two years after acquiring the site in 2017.