Popular blogging platform Tumblr is reportedly undergoing significant changes due to long-standing financial struggles.
In a leaked memo, it was revealed that the company has failed to get activity/revenue up since its 2019 acquisition and will now be maintained by a skeleton crew of Trust & Safety and Support folks.
The Memo reads,
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
“We are at the point where after 600+ person-years of effort put into Tumblr since the acquisition in 2019, we have not gotten the expected results from our effort, which was to have its revenue and usage above its previous peaks. It is better to have loved and lost than never to have loved at all. It is better to have tried to summit the peak and failed than never to have tried at all. We have learned a ton on the journey and honed skills we can use to approach other summits.
“As we talked about in the past, if it doesn’t work we’ll have a backup plan and set up the business so we don’t need to let anyone go, we’ll just need to reflect and decide where else we should concentrate our energy together, This plan is happening now: the majority of the 139 people in Bumblr will switch to other divisions. No plans for any switches in Happiness or T&S.
“We assume the first choice for everyone working on Tumblr is to continue working on Tumblr, but we’re going to give everyone an opportunity to have a top three ranked list of what other things around Automatic they would be interested in working on To infuse some Tumblr mojo”.
The CEO Matt Mullenweg confirmed the memo’s authenticity on his blog, acknowledging the need for a new approach to address the platform’s financial woes.
Mullenweg disclosed that the current business model failed to generate sufficient revenue to support Tumblr’s infrastructure and staff, leading to dissatisfaction among users with attempted changes.
This will see the majority of Tumblr’s workforce move to different roles within Automatic, the parent company that owns Tumblr and employs approximately 1,900 people globally.
Mullenweg added that employees who have been performing really well in their work, have known that for over a year that they could be moved to revenue-generating divisions.
“We’ve also learned a ton working on Tumblr that I think will make our other products better,” he said.
He expressed confidence in setting up Tumblr for success in its next chapter and emphasized his commitment to maintaining the artistic and supportive aspects that makes the platform unique.
The CEO also hinted at the potential for a more streamlined and efficient Tumblr in 2024, with a focus on achieving growth with smaller, specialized teams.
In his words,
“We are shifting from the mode of ‘surging’ on Tumblr with tons of people to get it to exciting growth, to working on how we can run Tumblr in the most smooth and efficient manner. Pretty amazing things in the social and messaging space have been accomplished with small teams, so I’m actually quite curious to see a smaller and more focused Tumblr’s performance in 2024.”
Founded in 2007, Tumblr was acquired by Yahoo in 2013 for $1 billion. In 2019, Automatic, the parent company of WordPress.com, purchased Tumblr for only $3.
After Elon Musk acquired Twitter (Now X), Tumblr experienced a brief resurgence in popularity as Twitter users sought a new social media platform following Musk incessant changes.
However, in July, Tumblr’s CEO, Mullenweg, revealed that the platform was losing approximately $30 million annually.
In a bid to boost its revenue, Tumblr attempted a variety of new monetization strategies, including Live, a sponsored post feature called Blaze, an ad-free subscription, and a paid content feature called Post Plus. The platform is the latest of numerous social media sites to struggle with questions about monetization and focus.