Exclusive: Matt Mullenweg and Automattic bought Tumblr. What’s next?

Automattic just bought Tumblr from Verizon for reportedly 3 million dollars. CEO of Automattic Matt Mullenweg sits down with The Verge's Julia Alexander and Nilay Patel for this emergency episode of the Vergecast to share what his plans are for the micro-blogging platform. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:30Nilay Patel?

  Hey, everybody. It's Sam from the Vergecast Emergency Interview Episode. Julia Alexander and I sat down with Matt Mullenweg. He's the CEO of Automattic. That's the company that makes WordPress and SimpleNote. Automattic just bought Tumblr, the legendary blogging platform. You might recall Tumblr sold to Yahoo years ago for $1.1 billion. Then Yahoo collapsed, sold itself to AOL. AOL collapsed, sold the whole kit and caboodle to Verizon. No one's taking good care of Tumblr in the meantime. They sold it. The reported price is true. Automattic bought it for reportedly $3 million. But now they have it. Matt Mullenweg is a legendary CEO on the open web. He's been running WordPress for a long time. WordPress powers so many websites.

• 1:13Nilay Patel?

  It's over 30% of the sites in the web are WordPress sites. And he has big plans for Tumblr. And he was nice enough to sit down with us and tell us what those plans are. Check this out. This is Julia and I talking to Matt Mullenweg, CEO of Automattic.

• 1:28Nilay Patel?

  All right, Matt Mullenweg, you are the CEO of Automattic, which makes WordPress. And now I believe you own Tumblr. Welcome.

• 1:35Speaker 02

  Yes, very excited to be here.

• 1:36Nilay Patel?

  So, big news. Automattic purchasing Tumblr from Verizon. Just walk us through that, right? I mean, this is, the story of Tumblr is long and winding. I think a lot of folks are very happy that it's in good hands at WordPress now. Dave Karp tweeted, "I'm so happy it's here." Mark Arment, who used to work at Tumblr, tweeted, "He's very happy." So, a lot of Tumblr OGs extremely happy it's WordPress. But how did, how did this happen? Verizon call you? They send you a 5G Samsung phone with like a Note on the screen? How did this go down?

• 2:07Speaker 02

  Wow, that would have been awesome, actually. I mean, I've, I've long been a fan of Tumblr. And I've been a user pretty much since it started. There's been some features in WordPress, certainly inspired by Tumblr over the years. And I was bummed when it sold to Verizon, or sorry, to Yahoo. Gosh, was that 2013 now?

• 2:24Nilay Patel?

  Yeah, for $1.1 billion.

• 2:26Speaker 02

  For $1.1 billion. And so I was very happy for the team. I was a little relieved as a competitor because Tumblr's so cool. And at the time, Yahoo was not cool. But around this, you know, I believe Verizon reached out to a number of folks and also had a ton of folks incoming because the news of Tumblr being for sale did leak, I believe, in the Wall Street Journal a few months ago. So I know they had a lot of incoming, a lot of good bidders. I'm really glad that they chose Automatt to be the home for it because I do believe that we're the best place that Tumblr could be in terms of just what we do, what we're passionate about, what the team's already doing. There's a lot of overlap between wordpress.com and Tumblr. So I'm really glad this is how it ended up. But it was a difficult process.

• 3:07Nilay Patel?

  Yeah, I want to dive into the process. I want to just get it out of the way. I want to talk about the future of Tumblr. But the purchase price was reported to be $3 million. Can you confirm that?

• 3:17Speaker 02

  I like how y'all just ask for the same questions, hoping someone will answer.

• 3:21Nilay Patel?

  Well, I mean, A, I think I'm obligated. I think Julia would kill me if I didn't ask. And B, it's a pretty precipitous drop in value. So I'm curious if you can discuss that a little bit.

• 3:32Speaker 02

  Sure. We're referring to Verizon on kind of all the details there. It's really up to them for what to disclose or not. I can talk more generally that I would think, you know, I just did a blog post about this. Verizon is a company that has over $120 billion in revenue. They got Tumblr through Yahoo, which then merged with AOL, became Oath, got bought, became Verizon Media. It was, you know, it was something they inherited a few levels down or a few levels deep. I think that their top priority was not trying to maximize the purchase price. In fact, there might even be a corporate reason for the purchase price to be lower for taxes or something. They were really looking for where their best home was going to be. And so that was really where we tried to optimize the deal. Especially in terms of bringing over the close to 200 people. We're taking them all on.

• 4:16Speaker 02

  And I am aware of some of the details of some of the other bidders. They were not planning to keep much of any of the team going. So we take more of a Berkshire Hathaway approach. We really want to bring over the management, the team, take what was working well, which is Tumblr's engagement, and grow from there.

• 4:30Nilay Patel?

  So that's really interesting. So talk about just that bit of the process. I think most people listening to a show like this are not in your shoes very often, where you go out and you buy sort of a legendary internet property. There's a big telecom company involved. There's other bidders who, I think you mentioned, I read your blog post, there's private equity companies who just want to break the thing into parts and sell for scrap. Most people are not usually in that situation. So just describe what it was like going through that process.

• 4:58Speaker 02

  We actually, people send us stuff all the time. So we kind of look at at least a few acquisitions a week. Most are not a good fit. For this, what we do is, you know, there was kind of a deck they had. We went over and met the management team and a few folks who work on the Verizon media and Verizon side of things. I had some contacts at Verizon that I pinged separately. And then there's a diligence process. You try to find out as much information about the business. You talk about possible outcomes. You just kind of figure out what works best for both sides. We always approach deals from kind of a win-win. So what I like to do is understand what motivates the other side and what's most important to them. And then try to find the intersection, the Venn diagram overlap of what you're able

• 5:43Speaker 02

  to do and what's important to you.

• 5:44Nilay Patel?

  So were you mostly initiating with Verizon or with Tumblr folks?

• 5:48Speaker 02

  That's actually a good question. So both. So we both interacted with the Tumblr folks. And it's just kind of Verizon running the process. They have some extremely experienced corporate developments and lawyers and everything, so.

• 6:03Nilay Patel?

  Verizon lawyers? I don't believe it.

• 6:05Speaker 02

  I'll say their lawyers are super good. It was some of the agreements that came over were like, whoa. So, but you know, the team at Automattic, like I said, is very tiny, but powerful. And, um, and we worked really, really hard to make this happen. There was an exclusive period and then, um, kind of the deadline and we got everything signed up on Sunday.

• 6:27Nilay Patel?

  So it deals closed. Tumblr is a Automattic property now?

• 6:30Speaker 02

  We are all signed. You know, I believe that terminology is the deal is subject to customary closing conditions. So it's going to take a, you know, call out a few months to actually transfer everything over. But yeah, we're all signed and agreed. And so it's basically 99% of the way there.

• 6:45Nilay Patel?

  Okay. So that's the deal. What do you want to do with it?

• 6:47Speaker 02

  Goodness. Were you ever a Tumblr user?

• 6:49Nilay Patel?

  I briefly hosted my, my personal blog on Tumblr.

• 6:52Speaker 03

  It is still my second most used daily app.

• 6:55Nilay Patel?

  I mean, this is the reason I, we were so excited to talk to you. The community on Tumblr, it's gotten a little bit smaller, but the community that's still there is ferocious.

• 7:03Speaker 03

  Yeah.

• 7:03Nilay Patel?

  It's still enormously popular with those folks. I think it's like Taylor Swift's favorite.

• 7:08Speaker 03

  She's still using it.

• 7:09Nilay Patel?

  Social media platform. So Taylor Swift and Julia, I mean, what more do you need?

• 7:12Speaker 02

  Frank Ocean.

• 7:13Nilay Patel?

  Frank Ocean.

• 7:14Speaker 02

  Bruce Sterling. There's some cool folks on there.

• 7:16Nilay Patel?

  When we were launching The Verge and we didn't have a website yet, all of us just sort of like tech blogged on our personal blogs and mine was on Tumblr. So I used it a lot then. And then like basically my last Tumblr post is, hey, check out The Verge.

• 7:31Nilay Patel?

  Where I failed to blog now for a number of years. It was a platform at that time that was so flexible, right? You, you either could just use it. I mean, I use it effectively as a replacement for WordPress to host my personal blog. Other people use it as a social network. Other people just, I mean, BuzzFeed has done the best job of monetizing Tumblr of any company. Like they just look at it for content and repost it.

• 7:53Speaker 02

  Really? Oh, oh, yeah. Cause they, they rip off a lot of stuff from it.

• 7:56Nilay Patel?

  Uh, well, there's your first task. But yeah, so I'm curious. I mean, it's so many different things. It has not been well tended to, um, by its variety of corporate parents. You seem like you're very interested in tending to it. Where do you, where do you want to focus? Where do you want to go?

• 8:10Speaker 02

  Yeah. And Julie, do you mind saying, like you said, it's your second most used app? What do you use it for?

• 8:14Speaker 03

  I love the Marvel movies.

• 8:18Speaker 03

  This is like a joke at our office. No, but I genuinely am like a huge, huge fandom person, always have been. So like I graduated from, I also had a WordPress blog and then moved to Tumblr because I started writing and reading fanfiction and Tumblr was like the go-to place along with like FF.net, Neo3, but Tumblr was like the go-to place for fandom and arguably I think still is.

• 8:41Speaker 02

  So this was one of the things that really surprised me is I think I thought, as probably many do, that Tumblr had kind of died under its variety of corporate parents. And then actually being able to see some of the numbers, including some of the numbers post when they changed their adult content policy, I was like, wow, this is still got a ton going on. You know, more of that, we'll be able to talk about more of those numbers after the close because I think they're really, really interesting. But like I said, it actually hasn't transferred over yet, so I don't want to speak out of turn. But there's huge engagement and like you said, the people who are, love Tumblr, use it every day. You know, they have more daily active users than WordPress.com has monthly active users. They've really cracked a lot of the social side of it.

• 9:23Speaker 02

  In terms of what we want to do, you know, one thing that also impressed me was just the team, the people who were still there and working on Tumblr, really passionate about their community, about what the software could do. I think that they, well, I know that they have a lot of things that they want to launch and do, some that are even already fully built, that while this process was going on, you know, it didn't really make sense to add new things that change your service significantly or things like that. But it's a very innovative team as well. You know, Tumblr pioneered a lot of what later would show up on Twitter, Instagram, WordPress, all sorts of other places. So it's always been a very creative team and I really am looking forward to seeing that just unleashed because we are a very, I mean, I guess we're still a corporate parent,

• 10:06Speaker 02

  but we're a very friendly one and we're all about blogging, innovation, publishing, communities. So I would love for Tumblr to become a social alternative, you know? That's one that's in line with Automattic's values around privacy, freedom of speech, around publishing, but has the sort of fun and friendliness of some of the other networks we use, but without that kind of democracy destroying.

• 10:31Speaker 02

  I don't know what you want to call it.

• 10:32Nilay Patel?

  Well, I think you want to you want to call it Facebook. I mean, I tweeted last night, like, imagine if Tumblr had said independent and became a competitor to Twitter and Facebook and Google and was chasing those dollars in the market, that attention. Is that your goal, to go right at Facebook and Twitter with Tumblr?

• 10:48Speaker 02

  No, not at all, because I think that we've always had some different models. So advertising is definitely something we're going to explore. We do definitely want to grow Tumblr's revenue. Right now, they're burning a lot of money. But, you know, long term, I would say I'm also super interested in experimenting with upgrades. WordPress.com has always been an upgrade centric model. You know, it's freemium, user free, and then you can buy plans anywhere from $40 to $450 per year to get added functionality. I'm curious about turning on things like some of the e-commerce functionality we've been developing with WooCommerce memberships. Those things, I think, would be very, very interesting to the Tumblr community, which currently kind of uses Tumblr, but often points people other places to do those things. Patreon, other things like that, Memberful.

• 11:30Speaker 02

  So there's just so much to unlock there, once we can kind of unlock the team.

• 11:34Speaker 03

  So the Tumblr community, which I am like very much a part of, has watched as executives from Yahoo and Verizon came in and tried to grow something that they really didn't understand. Famously, in 2016, Yahoo executive reportedly said Tumblr is the next PDF. Like, that's what they saw it as, which is like now a major joke in the community. But what we've seen happen, and I'm sure like if you looked at Tumblr last night, we've seen this decline of trust between the community and whoever's in power, because they've been burned so many times. So I guess my question is, like, you're coming in, you're the new corporate overlord. How are you going to prove that, like, you know what Tumblr is and should be in a way that doesn't make them feel more alienated than they already are?

• 12:15Speaker 02

  I guess if anyone had nervousness now, I would just say, look at, you know, Automattic's 14-year history, WordPress's 16-year history. We have kind of a long track record with these things, and including building a lot of trust in an open source community, which, by the way, is usually also very skeptical of any companies or corporate involvement. But really, I would love for people to judge us by the actions over the next 18 months. You know, there's, call it two months to close, there's gonna be a few months of integration and migrating data and servers and everything like that. But then after that, really look at what happens. And ultimately, that's how I always want to be judged by our actions.

• 12:49Nilay Patel?

  So that's, I think, brings up a big thing in the community, an example of sort of the Verizon disconnect. Obviously Verizon decided that adult content was going away. You tweeted last night, "If you people want big policy changes here, put pressure on the app stores of Apple and Google, no one else has any leverage." What do you, what did you mean by that?

• 13:05Speaker 02

  Hmm, this is a very nuanced issue.

• 13:08Nilay Patel?

  I mean, I'll say this, Dieter Bohn, our executive editor, said, "You have to ask about this, this is the whole thing." Like, this is the whole issue with the web, right? There's the open web, which you guys build on, then there's sort of the app store world. Apple doesn't want adult content in the app store, Google doesn't want adult content in the app store. It sounds like a lot of Tumblr users are still mobile. I mean, they're younger, they're definitely mobile. That seems like a big disconnect here. And that, I mean, every layer, I think, of tech policy is implicated in that conversation.

• 13:39Speaker 02

  Yeah, and some people said, "Well, do you need to be in the app store? Just have a web version." But, I mean, apps really are it, and I believe Tumblr is one of the top 30 or 40 apps in the social networking category. It's usually top couple hundred globally, so their app is a big part of how people interact with it. And I don't know if you've ever been through an app review process, we've even run into this on WordPress before, you know, they'll search for porn. Actually, it's not like it needs to be on the homepage or on the signup, they'll like, really look for it. And if they find something, you can be taken down, you can get in trouble, like there's, and by the way, it's arbitrary. Like, maybe they, something that you launched a year ago, now they're saying is not allowed.

• 14:20Speaker 02

  Like, app stores can be kind of fickle, and not capricious, but sometimes feel a little arbitrary. And so if you're gonna play, but honestly, I think if you're just gonna be there, if you're gonna be on the app store... You want to try to play by what they support. The more nuanced and broader issue, which I think is affecting every place that has user generated content, is, you know, I think that pretty much everyone has moved beyond even where we used to be, which is saying like, hey, if it's First Amendment, if it's not illegal, if we don't get a legal order, take it down, we're happy to host it and promote it. And now everyone is kind of realizing like, well, there's a lot of stuff that's not illegal that you maybe don't want to spread everywhere else. When you talk about the adult content on Tumblr and the changes that they made, it's really like four or five issues mixed in there. There was definitely spam.

• 15:05Speaker 02

  I was more active user Tumblr, you know, eight or nine years ago. And when I logged back in, checking it out, my feed was full of nude pictures that were linking to a spam site. And this wasn't something I had subscribed to, but it was a Tumblr blog that had been kind of taken over by spammers and they were just filling it, you know, posting five times an hour with these kind of ads for like some sort of chat side. It was spam essentially. So that no one wants, right? Now that there's lots and lots of shades of gray in between, and I do realize and definitely want to learn more, there's been a lot of different communities on Tumblr and, you know, some of the baby might have been thrown out with the bathwater. So we're definitely, you know, like with any sort of policy or algorithm or AI or

• 15:48Speaker 02

  whatever is doing the filtering, like you want to evolve it and make sure that you're blocking what you say you want to block and not catching anyone legit as well.

• 15:56Nilay Patel?

  So I mean, that brings up, I think, the biggest sort of dilemma, which was contained in your tweet. You could do that stuff on the web and you could evolve the content policy and make it maybe less restrictive there, but in the app, you would still be kind of stuck inside of whatever Apple and Google want?

• 16:12Speaker 02

  That's my understanding. And you know, another thing people ask is, well, how do Reddit and Twitter get away with it? Because both have tons of adult content. I don't know. I'm actually curious. I believe Reddit has like a setting you do on the web, that then if you turn that off, you can get more adult stuff in the app. But I wonder if that just works because Apple hasn't noticed it yet, or if it's actually like something that is allowed within their policies. I don't know. I will say that overall, a really thriving home for adult content is something that is probably best for like a company or a website which is totally dedicated to it. I know a bunch of people, a bunch of sites popped up after the policy change in December.

• 16:54Speaker 02

  So, I mean, that might be a better future versus someplace where, you know, there might be a gray line or evolving policy.

• 17:01Nilay Patel?

  Yeah. How do you think about, I mean, obviously WordPress is a huge tool, service, platform for all kinds of creators. It has, obviously, a different monetization model, as you said. I mean, entire massive media publications are hosted on WordPress and individuals use WordPress. Do you expect that kind of scale for Tumblr? Or do you expect it to be kind of more of the social network that you're describing?

• 17:25Speaker 02

  Well, I think the primary user experience is going to be that social network. But there's no reason that, including, you know, VIP or really high-end users of WordPress, can't tap into that social network and a really native, beautiful integration. You know, one of the things that Facebook did, kind of after Cambridge Analytica, is they actually removed all their posting APIs. So you used to be able to post to WordPress and we would auto-post to Tumblr, Twitter, LinkedIn, Facebook, et cetera. And they turned off those APIs after Cambridge Analytica, kind of in the hubbub that followed, and no one really objected or talked about it too much. But effectively, they turned off the part that allowed you to put external content into the Facebook News feed and everything.

• 18:06Speaker 02

  And that was actually kind of like a big change in how the open web worked, because previously all of the social networks had had, you know, some sort of way to get things in and out. Tumblr, for example, used to support RSS feeds, so you could follow things that weren't actually hosted on Tumblr. I would love to bring features like that back, because, like I said, I would love for Tumblr to be a better part of the open web. Love for it to support, you know, maybe some of the new open web formats or, ah, gosh, what's the stuff that Tontech Celik works on? Open social network. XFN was something we did way back in the day. There's lots of things that you can say have a purpose-driven, more open network. And I'd be very curious how, you know, clients can be built on that, that aren't necessarily... Operate in a more distributed fashion, a more open source fashion,

• 18:50Speaker 02

  and not necessarily even, maybe even dependent on a centralized source or content policy.

• 18:54Nilay Patel?

  I guess earlier I asked you about competition in terms of ad dollars, but let me ask this question a different way. It really sounds like you want to be a competitor to the big social networks in terms of user attention, openness, politeness, right? Like, strength of community. Is that what you're aiming for?

• 19:10Speaker 02

  I want to create a place on the web which is fun and supportive and substantial. You know, you're an old-school web user. Like, at one point blogging had a real magic to it, a real frisson. Like, it was like, kind of, you'd have blog rolls and links, and people would follow and comment, and you'd keep up with things. And it was a really, really nice social network, but that also was totally distributed, and people would have their own designs and all those sorts of things. I think we can bring some of that back and reimagine it in a mobile world, which is where Tumblr is also super strong.

• 19:43Speaker 03

  I'm also a little interested because when we think of Tumblr, I think it's so easy to look at it with rose, through rose-scented glasses. And I mean, I say this as someone who uses it and loves it, but Tumblr has a bunch of major issues. It's seen a huge rise in extreme ideology on the platform that Tumblr's had to address. It has seen major issues around mass shootings and the way that they glorify shooters that they've had to address. And the sentiment on Tumblr is not dissimilar to the sentiment on Twitter, which is, you know, constantly like, Jack Dorsey banned the Nazis. Like, why is this still a thing on this platform? And Tumblr has that on its side as well. And it's become this huge issue. I just feel like it doesn't get talked about as much because it's not as big as Twitter. So my question to you is like, do you plan to actively go in

• 20:28Speaker 03

  and like, try to clean this up? Or are you just gonna kind of leave it be in the way that Verizon and Yahoo have for so long?

• 20:35Nilay Patel?

  It's a low bar, truly.

• 20:37Speaker 03

  I'm sorry.

• 20:39Speaker 02

  Yeah, I feel like not the toughest question I've ever gotten.

• 20:44Speaker 03

  I guess, well, how are you planning to do it? Like, because that would require hiring moderators. Like, there's a lot of investment that goes into cleaning up a site.

• 20:51Speaker 02

  Yeah, have you heard of those problems on wordpress.com recently?

• 20:55Speaker 03

  Uh, no.

• 20:56Speaker 02

  There you go.

• 20:56Speaker 03

  But I would not call WordPress a social network in the way that Tumblr is.

• 21:00Speaker 02

  But probably gets as much, if not more, published to it. These are very, very difficult problems, so I do not want to trivialize or say that anything, even if you work really hard on it, will be 100%. But I do think that one of the things that excites me is Tumblr has a great trust and safety team, so does the rest of Automattic that works on wordpress.com and everything else we produce. So, these teams have a lot of overlap, and I'm looking forward to them working together. I think it's probably the first things that we'll try to harmonize across acquisition is just say, hey, we're doing 99% similar work, like, makes our policies are consistent. And also, what have you figured out? Tumblr has actually really amazing automated tools that we don't have on wordpress.com that works really well. And what have we sort of navigated with kind of the nuance of content that people host on WordPress?

• 21:45Speaker 02

  And how can we use that to inform and really encourage a healthy community on Tumblr as well?

• 21:51Nilay Patel?

  Do you see these platforms coming together? I just get the sense that you intend to keep them apart, which makes sense, right? One is a very, like, user-centric social network, the other one is a publishing platform. But do you envision them coming ever closer together or more on sort of the policies, procedures, back-ends?

• 22:09Speaker 02

  I think there's a lot of overlap in what both do. I would love for them to interoperate. I do believe that, long-term, there's an opportunity to merge a backend technology, so that Tumblr are actually powered by WordPress on the backend. Because WordPress, we think of it as an open web operating system, you know, powers 34% of websites now. It should be able to power everything that Tumblr does. But that sort of, what I would call the Tumblr app, the user experience, the dashboard, that'll always be its own unique thing and evolve in its own way. Because it is, it is something distinct from everything else on the web. And that's what I think is one of the most interesting things about Tumblr as a unique, iconic brand. That I'm looking forward to being around for decades to come. It has something that's just a bit different, you know? It's funny, because almost every social network evolved to incorporate forms of blogging.

• 22:53Speaker 02

  Whether it was microblogging, photoblogging, audioblogging, which is podcasting. These are all kind of forms of things that were originally pioneered on blogging. Yet, all of these things have become so balkanized. I think it's very, very interesting to see if you can bring them together a bit, as Tumblr post-formats do, what people, what kind of experience people can create for themselves, and really making it something where they choose what they follow, and not just being algorithmically pushed whatever is the most incendiary thing that might be in their feed.

• 23:20Nilay Patel?

  What is a tweet storm but enforced paragraph breaks for bad writers? I think about this every day. It's just a fact. I'm getting some, like, strong Google Reader vibes from you. Not like that you're gonna build an RSS reader, but Google Reader, it's still lamented that it's gone, but it was the application that brought together an entire ecosystem of blogs. Do you see that? I mean, that role is long vacated. I'm maybe the last Feedly customer on Earth. Do you see that role as something that you can fill?

• 23:48Speaker 02

  I think that there's something super valuable there. And when you think of time well-spent online, when you think about people getting more control over how they put their attention and their time, think about their data. Are they investing their kind of data into a place where it can come back out, where it benefits them as much, if not more, as it benefits whoever's hosting them or whatever software they're using? Do they have true ownership? These are all things that, I think, never go out of style. We have sort of peaks and troughs of openness on the web. I think we are exiting a trough. If you think 2016, maybe, was the peak of the closed social networks and proprietary software. We are seeing a incredible growth of open source, of distributed systems.

• 24:34Speaker 02

  Whether that's in information, whether that's in blogging, whether it's in CMS's WordPress, with money, with crypto and everything related to that. These are powerful revolutions that are going to play out over, I think, the next 15 to 20 years. But it's only going to go out from here, in my opinion. And this is also my life's work. So I've been working on this for 16 years. I hope to work on these issues literally the rest of my life. So I'm going to keep working to create the kind of web that, if I ever have children, that I want them to grow up with.

• 25:01Speaker 03

  Matt, correct me if I'm wrong. You said you wanted to introduce more advertising to Tumblr, right? Like, you wanted to bring that in as a revenue means?

• 25:07Speaker 02

  I don't know if "more" is the best word, but I do think that the advertising they did do is significantly lower than what you would expect. It makes significantly less than what you would expect for the amount of traffic and audience they have.

• 25:18Speaker 03

  Right. So the interesting thing about Tumblr, quick background, I cover YouTube a lot, is that Tumblr, I feel like, will run into, or could run into, the YouTube issue, which is the community was so different than what it was pre all these influence of ads. Because the site had to change in order to ensure that advertisers were happy, which is natural. But Tumblr is such a niche audience still. It gets away with being so weird. Like, that's why people still love it. It's weird whether it's fandom or it's like just weirdness in general. Do you worry about the idea of bringing in this kind of ad? Structure is the wrong word, but bringing in ads will affect the community? Will affect how people view and use the site?

• 25:58Speaker 02

  I think there's an opportunity there. My understanding is right now, most of the ads are kind of programmatic, which means kind of network ads. It's not where, say, a movie studio or sort of a specific advertiser, who really understands Tumblr audience, is saying, "This is who we want to reach and with a message we want to target to them specifically." So that's an experiment, of course, but I have high hopes that the, as you described it, the weirdness, what I would describe as the beauty of the Tumblr community, is actually really, really appealing. And there's people there that we could do a good job with advertising. Now, I will also couch that by saying, Automattic is not an advertising company.

• 26:42Speaker 02

  We're a subscription and upgrades company. So perhaps the advertising thing doesn't work out and it's all more of a subscription based. I think that can be really healthy and really positive as well.

• 26:52Nilay Patel?

  I want to zoom out of that a little bit. You run a publishing platform. Like I said, it scales to all kinds of users. We run one, two, right? We run Chorus. It doesn't have nearly as many customers as WordPress, but one really good website, in theverge.com. At least one. There's some other ones at this company that are pretty good. It's a hard time for like media monetization. And you mentioned earlier BuzzFeed rips off Tumblr a lot. I think one of the things that I see is, okay, maybe the BuzzFeeds of the world can like scrape by with a bunch of Tumblr posts, but the people who make the stuff on Tumblr rarely get paid for their work. And if the advertising doesn't work and you start charging upgrades and subscriptions, now you're sort of like charging them to make and consume that work.

• 27:37Nilay Patel?

  How do you think about the relationship to creators? Like, is there, this is maybe just a big question, you maybe haven't thought about it, but is there a way to sort of empower and compensate the creator? I mean, Tumblr is such a force of culture. Is there a way to give back to it in a way that isn't just like transfer of value to BuzzFeed?

• 27:55Speaker 02

  Totally. Let me talk about what we do for that on wordpress.com. So, one, we have wordpress.com upgrades. So you can buy and you get additional customizability. And yes, it's a cost, but you can get so much more power and control over your site, including things like your own domain name. It's not bad. It's a couple, it's a week worth of Starbucks or something. You know, it's not a huge investment for your complete online presence. We have a program called Word Ads that allows people to run ads. We essentially bundle everyone together, can do really advanced things like header bidding and other things, ensure quality, and then do a revenue share. So you can have your own ads on the site and make money from that traffic. We've also been launching features around monetization or e-commerce.

• 28:39Speaker 02

  So there's a simple payments button. There's a membership stuff that's launching soon, all the way up to full WooCommerce, which you can build. You know, there's stores that do over 100 million a year in annual revenue built on WooCommerce. So again, from the simple, almost PayPal-like Pay Me Now button, all the way up to sophisticated stores are things that you can do on WordPress. And we see literally north of 10 billion of transactions a year go through that and growing fast. So I would love to open some of that up and to the Tumblr community. These are things we've built already. How it fits or works for Tumblr is really going to be up to that team. You know, they understand that user base and that community better than anyone else in the world.

• 29:21Speaker 02

  So I'm very curious to see how, using some of the raw materials and the technical things that we've already built inside the rest of Automattic, how they think that will fit best with the Tumblr community. I personally would be really excited about memberships or some sort of recurring payment.

• 29:36Speaker 03

  So like $4.99 a month or whatever, you'd get exclusive type of content, like essentially what YouTube and Patreon are doing right now.

• 29:44Speaker 02

  Or just a way to support a creator that you love. You know, have you ever read Kevin Kelly's seminal essay, "1,000 True Fans"?

• 29:51Nilay Patel?

  I talk about 1,000 true fans with Casey Newton, I would say, once a week. This is just...

• 29:57Speaker 02

  That's awesome. Maybe we can put it in the show notes or something. Everyone should read it. It's amazing. It's a... Do you want to summarize it?

• 30:02Nilay Patel?

  Yeah, so Kevin Kelly says if you're a creator on the internet, you only need 1,000 true fans who buy every single thing that you make in that scale. I think his specific example is you're a band, right? I always say you need 100,000 true fans. That's my...

• 30:15Speaker 02

  I think it depends on your price point.

• 30:17Nilay Patel?

  I'm a capitalist at heart. My price point is like, how do I get a boat? But, um, I'm kidding.

• 30:23Speaker 02

  But we're seeing so many cool examples of this. You know, one of my favorites, because he used to be a colleague of mine at Automattic, is Ben Thompson over at Stratechery.

• 30:29Nilay Patel?

  Yeah.

• 30:30Speaker 02

  But there's tons of other examples, particularly in the creative side of things. Not that what he does isn't creative, but more like music, art, et cetera. That, um, yeah, I think that this would be a really amazing way for a community to interact and for people who might just mostly consume to also have a way through the app to support their favorite people.

• 30:48Nilay Patel?

  I mean, that's super interesting. It's fun to rethink Tumblr in this moment as... Is like a powerful force in the creative ecosystem when I think for so long it's been it's been withering. I mean, it's just obviously been not tended to. Have you talked to that team yet, like all 200 of them? Have you like had the big all hands, hey, we're the new kids, we promise not to ruin it more?

• 31:12Speaker 02

  We just did that on Monday. I'm actually at a seminar for the Aspen Institute this week, so I wasn't able to be there in person, but I will be heading there to meet the team in person next week, and I'm really looking forward to it. So we've got to spend a lot of time with the executives there through the whole process, but it was a secret process. So the rest of the folks, I'm going to do office hours. I'm really going to try to meet and listen to as much as possible. Also, you know, other folks who have been involved with Tumblr before. One of Automattic's investors and Site Venture Partners, Devin, was actually an investor in Tumblr. And you saw the tweets from Marco and David Karp and Bijan and like, I really want to meet them and talk to them and learn from them where they feel like things could get better, where maybe things took a wrong turn, how they think

• 31:57Speaker 02

  Tumblr should evolve in today's world. Like, there's so much, so much intelligence at the edges and wisdom in the team that that's, I think, what we really want to use to inform the next chapters.

• 32:09Nilay Patel?

  How big is Automattic?

• 32:10Speaker 02

  Automattic is about 950 people now.

• 32:13Nilay Patel?

  So it's a pretty significant addition of staff.

• 32:16Speaker 02

  Yeah, it is by far our biggest acquisition, both in terms of investment and people.

• 32:20Nilay Patel?

  And you're holding on to everybody?

• 32:21Speaker 02

  Yeah, we're bringing the whole team over.

• 32:22Nilay Patel?

  That's great. Are you gonna try to integrate your engineering teams, or are you gonna leave them alone at first?

• 32:26Speaker 02

  So I would think of, we've done a few acquisitions like this before. You want to integrate gently. So like, look at where things make sense and do that first, show success, and then start to expand. Long term, like I said, there's a lot of overlap between wordpress.com Tumblr. There's also a lot of things that are totally different, and I could see being independent kind of forever. So, but especially from an engineering point of view, I am excited to build more things using kind of React and APIs that might actually be reusable across them. So even though, you know, we could have some code sharing across the apps. As you know, wordpress.com, including Calypso, which is kind of our front end, is

• 33:06Speaker 02

  100% open source. So that's all there, and we can see what kind of code sharing, or maybe what we can open source on the Tumblr side.

• 33:14Nilay Patel?

  Yeah, open source Tumblr?

• 33:15Speaker 02

  That would be pretty cool.

• 33:18Nilay Patel?

  That'd be rad. Last question. It's another layup. How soon until Verizon's weird ad tracking pixels are gone from Tumblr?

• 33:25Speaker 02

  Ah, that's a good question. So I would say that for all of those things, expect things to be kind of the same until we do the close. And then, you know, after post-close, think of that being October, we'll really start to look at our systems. So you know, Automattic has an approach to GDPR, an approach to tracking pixels. We're a very privacy-focused company. Like, we'll really start to try to integrate what Tumblr does with what we found works really well on WordPress.com, Longreads, SimpleNote, our other products.

• 33:55Nilay Patel?

  I have to say, SimpleNote is my favorite Automattic product. I'm just, I mean, it's like, it's literally, it's like my, it's the thing I use the most, so.

• 34:02Speaker 02

  Thank you. I really appreciated the Verge write-up of it as well. You know, it is, it was funny because the criticism is also what we love about it in that it doesn't do a lot of the other things. We try to keep it simple note, not fancy or complex note. So, thank you for using it. And I hope you notice we've actually been investing a lot in that as well. There's been a lot of updates to SimpleNote.

• 34:21Nilay Patel?

  That's great. Well, Dieter wants to know when end-to-end encryption is coming, but just let us know some other time. Okay, here's my actual last question. You've spoken to the employees of Tumblr. This is an opportunity on this show to talk to the people who use Tumblr, the community. What is the thing that you want them to know the most?

• 34:38Speaker 02

  Well, first, I would say thank you for using Tumblr and sticking with it. Second, I would say I hope and believe that Tumblr's best days are actually ahead of it. That, you know, as an independent company, again, as part of an independent company, it has the opportunity to be responsive, agile, and creator-centric in a way that, you know, it might have been constrained in some ways since 2013. So stick around, try it out, and keep an eye out, especially over the next six to 12 months, for some of the new stuff that's coming.

• 35:10Nilay Patel?

  Awesome. Well, thank you so much, Matt, for joining us. And then we caught you at the end of the day. We really appreciate it.

• 35:14Speaker 02

  No, it's been a pleasure. It's good talking to you both. You do.

• 35:18Nilay Patel?

  All right, my thanks to Matt Mollingway, CEO of Automattic. I know this was an emergency Vergecast episode. I am not on the chat show this week. Dieter will be running that one. We'll see how it goes. I'm on vacation. We'll be back next Tuesday with an interview, Friday with a chat show, and on and on we go, right into the heart of gadget season. It's coming. Summer's almost over. Get ready. Rock and roll.

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