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: tumblr
Companies: automattic, tumblr, verizon, yahoo


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  • identicon
    James H, 14 Aug 2019 @ 6:35am

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2019 @ 8:28am

      Re: Fiber is good for me

      I've heard good things about FiOS in general and think that's why Karl mentioned it: when management changed, Verizon stopped building their one thing people really liked, in favor of "mashing together a few failed 90s internet brands".

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2019 @ 10:22am

      Re: Fiber is good for me

      Did they set your house on fire during installation of fios?

      reply to this | link to this | view in chronology ]

  • icon
    Stephen T. Stone (profile), 14 Aug 2019 @ 6:35am

    I expect the death of Tumblr to happen once Automattic finds what little useable code exists in the Tumblr codebase and puts it into WordPress. That’ll take about three months, tops. 😁

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2019 @ 7:00am

      Re:

      Like the porn filter?

      Oh, sorry, I misread you there, you said useable code.

      reply to this | link to this | view in chronology ]

    • icon
      Thad (profile), 14 Aug 2019 @ 8:27am

      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.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2019 @ 8:45am

      Re:

      Wait, there's useable code?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2019 @ 7:11am

    I love how they are trying to target Millennials when that ship has sailed they should have been targeting Gen Z if they wanted a chance at clawing back.

    reply to this | link to this | view in chronology ]

  • icon
    dlesko (profile), 14 Aug 2019 @ 7:56am

    Shitty company

    they need to go away along with Disney, Spectrum, Comcast etc. Worst companies on the planet. Raping customers, no tech support etc. etc.

    reply to this | link to this | view in chronology ]

    • icon
      Thad (profile), 14 Aug 2019 @ 8:28am

      Re: Shitty company

      I'm sure you can think of a way to criticize unethical business practices without comparing them to rape.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 14 Aug 2019 @ 10:23am

        Re: Re: Shitty company

        Unless, of course, they actually commit the crime - which would not be unheard of.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 14 Aug 2019 @ 3:48pm

        Re: Re: Shitty company

        I concur.. rape is such an ugly word to describe ecoterrorists who steal food off the table and make your children eat mac n cheese instead of shiskabob surf and turf.

        reply to this | link to this | view in chronology ]

  • icon
    tom (profile), 14 Aug 2019 @ 8:56am

    Wonder how much Pornhub's rumored bid was? Of course, they may have figured that by now, damage done and too much time passed to recover even if they bought Tumblr and allowed porn back.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2019 @ 9:28am

    Go90 had Veronica Mars. That’s it.

    reply to this | link to this | view in chronology ]

  • icon
    Bloof (profile), 14 Aug 2019 @ 9:38am

    The moral of the Tumblr story is banning furry porn will cost you nearly a billion dollars.

    reply to this | link to this | view in chronology ]

    • icon
      Stephen T. Stone (profile), 14 Aug 2019 @ 9:42am

      Now now, lots of other NSFW artists and content creators got the boot (or left of their own accord) thanks to the NSFW ban, too. Don’t credit the furries for the entirety of Tumblr’s downfall.

      We’re maybe 60% responsible, at most. 😁

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2019 @ 9:45am

      Re:

      They didn't lose that much money from the porn ban. $700 Million was written off back in 2016 by Yahoo themselves, before Verizon bought them. While it makes for a nice narrative that banning porn will make you lose lots and lots of value, that simply isn't the case.

      reply to this | link to this | view in chronology ]

      • icon
        Stephen T. Stone (profile), 14 Aug 2019 @ 10:24am

        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.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2019 @ 3:43pm

      Re:

      I am imagining those billionaires are having those photos enlarged and mounted and hanging in their castles in a remote chamber!

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2019 @ 10:01am

    Verizon are good at two things: running networks, and lobbying government to hamstring broadband competition.

    Are they really that good at running networks? I think you're giving them a bit too much credit there.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2019 @ 11:28am

    All those words simply to convey "Verizon customers are going to see rate increases".

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 14 Aug 2019 @ 3:08pm

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2019 @ 3:37pm

    I loved surfing Tumblr back in the day. The photos were so beautiful, I hardly had a reason to go on a trip to witness earth's magnificent places! (not being a people person) And then Tumblr was sold and the site became lost forever. What a shame. Change SUCKS.

    reply to this | link to this | view in chronology ]


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