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HomeTECHAccording to the CEO, Tumblr loses $30 million annually.

According to the CEO, Tumblr loses $30 million annually.

If we’ve learned anything from the past year of Twitter clones, CEO battles, shitposting, and poor money-grabbing policies, it’s that it’s difficult to make a social media company profitable!

Tumblr is attempting to “build in public” and be more transparent about the business behind the fandom-driven platform after introducing some controversial features.

During a live-streamed Q&A, Tumblr users asked CEO Matt Mullenweg and COO Zandy Ring queries about the company’s future. The executives were not wholly forthright (Matt, please answer my question about how much money the blue checks generated—I want to know!), but they did provide fascinating insights into what it’s like to run Tumblr currently.

According to Mullenweg, Tumblr spends roughly $30 million more than it generates each year. Given the company history of Tumblr, this is not particularly surprising. Yahoo, the parent company of TechCrunch, acquired the 2007-founded blogging platform for $1 billion in 2013.

Tumblr was acquired by WordPress parent Automattic for $3 million in 2019. Despite having a loyal foundation of power users, Tumblr has struggled to increase its number of daily active users since its infamous porn prohibition.

As a consequence of the “exodus” from Twitter, Tumblr, like other mediocre social platforms, has a chance to grow. You will see a link that reads “Coming from Twitter?” when you log in to Tumblr. Sign up.” In response to the backlash against Twitter’s paid verification product, Tumblr increased iOS revenue by 125% by selling two blue checks for $8. These blue circles are useless. They are simply amusing.

According to Ring, Tumblr’s user base has not increased significantly.

She stated, “There is a common misconception that we are currently experiencing massive growth, but this is not the case.” Approximately 300 people were present at any given moment during this Q&A, which was advertised at the top of users’ dashboards.

Mullenweg reported to The Atlantic in November that Tumblr iOS downloads increased by 62% in the week following Elon Musk’s Twitter acquisition.

According to data obtained by TechCrunch from data.ai, Tumblr gained 880,000 new installations across iOS and Android in November, up from 450,000 and 500,000 in September and October, respectively. However, downloads returned to normal levels (around 400,000 to 500,000 per month) in subsequent months.

This Q&A session took place one day after Tumblr published its “core product strategy” on its staff blog, which surprised users because it resembles notes from an investor PowerPoint presentation rather than a blog post.

The post states, “The underlying problem is that Tumblr is difficult to use.” It describes changes such as making the distinction between reblogs and replies more obvious to new users and collapsing reblog threads.

In the post, the company stated that it would enhance “algorithmic ranking capabilities across all feeds,” which some users misconstrued to mean that Tumblr would force its users to use an algorithmic feed, causing widespread outrage on the site.

“Chronological feed will always be an option,” Mullenweg clarified.

Tumblr lacks enough users to be profitable, but the users it does have are fiercely protective of the site’s culture and do not adhere to standard consumer behavior patterns (they will pay to send crabs to their peers but not to subscribe to creators).

Therefore, Tumblr’s emphasis on facilitating sign-ups and augmenting discovery may be perceived negatively by the site’s most devoted users.

Throughout the Q&A, Mullenweg and Ring emphasized that they would not make permanent changes without user feedback.

However, generating an additional $30 million per year is a daunting task. To survive, Tumblr will likely need to do more than sell humorously meaningless digital products. A

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