Is Automattic Worth More Than Tumblr?

Published

May 28, 2013

6 Comments

With the recent news of Tumblr being purchased by Yahoo! for $1.1 billion dollars there have been a ton of comparisons between that purchase and many other blogging services. Naturally, WordPress has been among those comparisons.

But WordPress, as a software, is not like Tumblr because it’s open source software whereas Tumblr is not, so the closer comparison is really between Automattic, the largest commercial company and Tumblr as a company.

Is Automattic’s valuation even close to Tumblr’s $1.1billion? Well, it might be worth more as the recent liquidity / investment event with Tiger Global. As Fortune shares, “a source familiar with the situation says that Tiger valued Automattic “just below” the $1.1 billion price-tag that Yahoo recently bestowed upon Tumblr.”

Honestly, I think Automattic is worth more than Tumblr especially since it’s use spans not just tumbloggers but the Fortune 500 and enterprise. Sure, Tumblr has a few large companies and more that are moving there but not nearly as mainstream like WordPress (yet).

In a few years Automattic should scale well beyond Tumblr’s valuation with ease. The question isn’t one of a buyout as Matt has shared his desire to stay independent on many platforms and in some ways he’s forecasted the under-valuation of Tumblr:

News like this, whether from a friend or a competitor, is always bittersweet: I’m curious to see what the creative folks behind Tumblr do with their new resources, both personal and corporate, but I’m more interested to know what they would have done over the next 5-10 years as an independent company.

I think we’re at the cusp of understanding the ultimate value of web publishing platforms, particularly ones that work cross-domain, and while Yahoo’s all-cash deal by some metrics, like revenue, is very generous, I think it’s a tenth of the value that will be created in these platforms over the coming years.

Matt and Automattic have a bright future and it’s never been a better time to get involved and plugged into WordPress.

There are 6 comments

May 28, 2013 #

Justin Westbrooks

I agree with you, I think the massive reach and the incredible value that WordPress has added to the internet make it more valuable than Tumblr. Great story – thanks for sharing.
May 29, 2013 #

Carl Hancock

Is it worth more? Without a doubt. But I hope we never find out by way of an exit.

I have never understood why raising VC funding and then making a large sum of money via an exit such as a buyout is seen as a success.

I have more respect for companies that go their own way and do it on their own terms. Who says a comoany needs to raise money to be a success? Who says they must be bought out by a larger company for a large sum of money to be a success?

Too me a company that can survive and thrive longterm on its own is far more successful than one that is built to be acquired with an eye on an exit as the ultimate goal.

I get the feeling Matt isn’t looking to go the Tumblr route because he’s put so much of himself and his ideals into building and growing Automattic. Automattic without Matt just wouldn’t be the same.

Now an IPO… that’s a different story.

But I still think more companies should focus on profitability and sustainability rather than chasing VC funding and building with an eye to an exit as the ultimate goal. Profitability, sustainability and longterm growth should be the ultimate goal.
May 30, 2013 #

Brad Touesnard

No way Automattic is worth as much as Tumblr, I mean where’s all the porn on WordPress.com? To get their valuation anywhere near Tumblr’s, they’re going to have to get serious about attracting the porno peddlers.
May 30, 2013 #

Jason C

As I understand it, Automattic actually makes money and has a profit. Tumblr never did. That must count for something.
- June 1, 2013 #
  
  George Stephanis
  
  Yup. Automattic’s been profitable for quite a while now.
  
  An article from over a year ago now:
  
  http://allthingsd.com/20120425/automattic-grows-up-the-company-behind-wordpress-com-shares-revenue-numbers-and-hires-execs/
May 30, 2013 #

Jon Brown

That’s a hard call actually.

Tumblr is extremely good at what it does, however it still doesn’t appear to have a profitable business model. Hence it till looks like MySpace to me. It’s incredible at the moment, but I don’t see where the staying power is. I don’t see what would keep it from vanishish in 5 years to replaced by a shinier new fad, not how they’d evolve like Facebook has over the last decade.

Automattic is extremely good at what it does and it’s turning a profit, albeit a small one. Automattic therefore has the ability on it’s own to grow and pivot in new directions.

Either of these companies could do incredible things worth billions if they would diversify their product offering a little. Imagine if one of these two adding something like Wix or SquareSpace to build proper custom pages? The ability to have a great blog coupled with the tools necessary to build proper custom pages would be killer.

I think Automattic actually is better positioned to do that then Tumblr, but frankly either could.

How do you stay on top of your WordPress game?