Tumblr, the second-largest microblogging platform after Twitter, was sold for US$20 million on Monday.
Microblogging restricts the length of each post to no more than 140 words in order to cater for millennials who lack the patience to read long messages. Unlike other social media platforms, microblogging is used mainly for absorbing meaningful information.
Founded by David Karp in 2007, or 11 months after Twitter was launched, Tumblr was once regarded as chicer than Twitter since the platform encourages users to post photos and videos. It used to be the go-to place on the internet.
The company was acquired by Yahoo for US$1.1 billion in 2013, and its estimated market value hit US$3 billion two years later. But Tumblr has fallen way behind.
Twitter has over 320 million active users worldwide, with a market cap of US$32.3 billion.
Tumblr stopped publishing active user data since 2015. It’s estimated that the platform now only has 20 million to 30 million active users, or just a fraction of over 200 million users at its peak.
The owner of WordPress has paid just US$20 million to acquire Tumblr from Verizon, who had bought it from Yahoo.
It’s widely believed that WordPress intends to create a synergy between its full-blogging platform and Tumblr’s microblogging site.
A company that’s number two often finds it hard to survive in the winner-takes-all internet industry.
The way out is for smaller players to transform their business and carve out a niche.
Instagram and Pinterest started out in the microblogging industry, but they and they both successfully evolved into very different business models.
This article appeared in the Hong Kong Economic Journal on Aug 15
Translation by Julie Zhu
[Chinese version 中文版]
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