With Tumblr Sale, Verizon Continues To Stumble In Bungled Pivot Away From Telecom

from the ill-communication dept

So for years we’ve been pointing out that Verizon’s attempt to pivot from grumpy old telco to sexy new Millennial ad brand hasn’t been going so well. Oddly, mashing together two failing 90s brands in AOL and Yahoo, and renaming the coagulated entity “Oath,” didn’t really impress many people. The massive Yahoo hack, a controversy surrounding Verizon snoopvertising, and the face plant by the company’s aggressively hyped Go90 streaming service didn’t really help.

By late last year Verizon was forced to acknowledge that its Oath entity was effectively worthless. And this week, Verizon issued a statement saying that it would be selling Tumblr to WordPress owner Automattic after a rocky ownership stretch. Rather amusingly, Verizon tries to suggest that this was all part of some ingenious master plan:

“Today?s announcement is the culmination of a thoughtful, thorough and strategic process,? said Verizon Media CEO Guru Gowrappan. ?Tumblr is a marquee brand that has started movements, allowed for true identities to blossom and become home to many creative communities and fandoms. 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.”

Except there’s nothing “thoughtful, thorough, or strategic” about any of this. Tumblr you’ll recall was bought by Yahoo for a cool $1.1 billion in 2013. Bored with the slow ROI of broadband and hoping to challenge Google and Facebook in the ad space, Verizon bought most of Yahoo for $4.48 billion in June 2017. And while Verizon didn’t announce how much it sold Tumblr for, reports suggest that the company was effectively forced to almost give Tumblr away for less than $3 million after it spent much of the Spring looking for a suitor. Yes, great job, everybody.

None of this is what you’d call “thoughtful.” But it does once again emphasize how telecom giants eager to jump into the online ad space often have no idea what they’re doing. Companies like Verizon are good at two things: running networks, and lobbying government to hamstring broadband competition. Every time Verizon has tried to stumble outside of its core competencies (whether it’s running its own app store, its VCast apps, or the Go90 fracas), Verizon has fallen flat on its face, because as a government-pampered telecom monopoly, innovation, disruption, and pleasing customers are alien phrenology.

Verizon’s ownership of Tumblr is most notably marked by the company’s decision to ban porn on the platform (and anything even vaguely determined to be naughty), driven both by FOSTA and Verizon’s more puritanical management. That decision drove the site’s most creative users away in droves, though new owner Automattic says the ban is likely to remain in place.

A big part of Verizon’s attempted pivot to Millennial video ads was courtesy of newer executives like Lowell McAdam and Hans Vestberg. Their predecessor, Ivan Seidenberg, believed that Verizon should remain focused on what it does best (sometimes): building better, faster fiber networks. Seidenberg was a big reason for the company’s $24 billion push into pure fiber with “FiOS.” McAdam and Vestberg came in, froze most of those deployments, then tried to turn a legacy telco into Google by mashing together a few failed 90s internet brands. It’s not working, and anybody who is surprised by that hasn’t watched Verizon do business.

Filed Under:
Companies: automattic, tumblr, verizon, yahoo

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Comments on “With Tumblr Sale, Verizon Continues To Stumble In Bungled Pivot Away From Telecom”

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29 Comments
James H (profile) says:

Fiber is good for me

I’m a long-time Verizon customer. In my area, Their FIOS TV and broadband service has been a great alternative to the cable company. I cut off the TV years ago because I don’t need it anymore, but I was satisfied when I had it, and their customer service was several notches above the legacy cable company.

But I never cared one whit about Go90 or anything else.

Thad (profile) says:

Re: Re:

I certainly wouldn’t rule it out, though per Ars:

As for Tumblr’s underlying technology, Mullenweg wrote that "there are some good opportunities to standardize on the Open Source WordPress tech stack, but the front-end user experience on Tumblr will evolve on its own path."

It sounds like the plan is to work Tumblr’s backend functionality into WP but keep its frontend proprietary. We’ll see if that actually works out.

There are certainly some useful features in Tumblr that could be beneficial in WP. We’ve talked a lot about social media as a federated series of independently-run open-source sites; this could help that model.

Anonymous Coward says:

Re: Re:

Pornhub was never going to buy Tumblr, just like they were never going to buy Vine. [Pornhub is a shitty company owned by a shittier company in the form of Mindgeek.](https://techcrunch.com/2019/05/02/porns-secret-monopoly/ They latch on to things for the sake of PR while making it tough for sex workers to actually earn a living. They probably would’ve run Tumblr into the ground, and made anybody on Tumblr who didn’t care about porn (which is still a very important subset of people) feel unwelcome.

Stephen T. Stone (profile) says:

Re: Re:

They didn’t lose that much money from the porn ban.

But they did lose what could’ve made Automattic some post-sale money: Activity. If the reports about Tumblr being sold for (less than) $3 million are true, it didn’t go for such a paltry amount because Verizon was desperate to unload a heavily trafficked, highly active service.

ECA (profile) says:

So...

they changed from doing something they were good at…
To the highly competitive World of Open internet and TRY to compete with groups that have developed over many years??

Ummm ya.
Love the thought of the old days and the Corps dumping on all the competitors.. And what we have is what is left..
Then the Gov. Closed many sites..For REASONS…
And we got/have even abit less.

Go ahead and jump into the ring…TRY to make something Equal or better then what Is.. If you cant match it, you cant compete. Hulu had a fair chance, but gave up.

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