Social

Tumblr is losing $30M each year, CEO says

Comment

Tumblr icon
Image Credits: Tumblr

If we’ve learned anything from this past year of Twitter clones, CEO fights, shitposting and bad, money-grabbing policies, it’s this: Making a social media company profitable is hard!

After rolling out some unpopular features, Tumblr is now trying to “build in public” and be more transparent about the business behind the fandom-driven platform. In a livestreamed Q&A, CEO Matt Mullenweg and COO Zandy Ring fielded questions from Tumblr users about the company’s direction. The executives weren’t completely unfiltered (Matt, please, answer my question about how much money the blue checks brought in — I want to know!), but they did offer some interesting insights into what it’s like to run Tumblr right now.

According to Mullenweg, Tumblr is spending about $30 million more than it makes each year. This isn’t too surprising, given Tumblr’s history as a company. Founded in 2007, the blogging site was acquired by Yahoo (TechCrunch’s parent company) for $1 billion in 2013. But by 2019, WordPress.com parent Automattic bought Tumblr for just $3 million. Though it has a loyal base of power users, Tumblr has also struggled to grow its daily active users since its infamous porn ban.

Middling social platforms have an opportunity to grow amid the “exodus” from Twitter, and Tumblr is no exception. When logging into your Tumblr account, you’ll see a link that reads, “Coming from Twitter? Sign up.” And amid the backlash at Twitter’s paid verification product, Tumblr increased its iOS revenue by 125% by offering two blue checks for $8. These blue checks do not do anything. They’re just funny.

Still, Ring says that Tumblr hasn’t had that dramatic of a bump in its user numbers.

“People have this impression that we have massive growth right now, and we really don’t,” she said. During this Q&A, which was promoted on the top of users’ dashboards, only about 800 people tuned in at a time.

In November, Mullenweg told The Atlantic that Tumblr’s iOS downloads had increased 62% the week that Elon Musk finalized his Twitter acquisition. According to data that TechCrunch viewed from data.ai, Tumblr gained 880,000 new installs across iOS and Android in November, up from 450,000 and 500,000 in September and October, respectively. But in the following months, its download numbers returned to standard levels (around 400,000 to 500,000 downloads per month).

This Q&A session took place a day after Tumblr published its “core product strategy” on its staff blog, which caught users off guard, since it looks more like notes from an investor slide deck than a blog post.

“The underlying problem is that Tumblr is not easy to use,” the post reads. It outlines various changes, like making the difference between reblogs and replies less confusing to new users, or collapsing reblog threads. In the post, the company wrote that it would improve “algorithmic ranking capabilities across all feeds,” which some users misinterpreted as Tumblr saying it would force an algorithmic feed on its users, causing uproar across the site.

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

The fundamental tension of Tumblr is that it doesn’t have enough users to be profitable, but the users it does have are fiercely protective of the site’s culture — and, they don’t follow standard consumer behavior patterns (they will pay to send crabs to their friends, but they will not pay to subscribe to creators). So, Tumblr’s emphasis on making signups easier and improving discovery can feel like a harbinger of unwelcome change to the site’s most dedicated users.

Throughout the Q+A, Mullenweg and Ring emphasized that they would not make any permanent changes without user feedback. But regardless, making an extra $30 million per year is a serious challenge. Tumblr will probably have to do more than sell useless (yet hilarious) digital goods if it wants to stay afloat.

Tumblr’s only viable business model is shitposting

Is the ‘exodus’ over? Here’s how Twitter alternatives have fared since Elon Musk’s acquisition

More TechCrunch

Ahead of the AI safety summit kicking off in Seoul, South Korea later this week, its co-host the United Kingdom is expanding its own efforts in the field. The AI…

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

9 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities