This is How We Occupy Twitter
In May 2013, the social media darling Tumblr was on everyone’s lips. It was rising in popularity and size. Full of young, online users, it was an attractive target for Yahoo. So attractive, in fact, that Yahoo paid $1.1 billion in cash to buy it.
Six years later, Tumblr was sold to WordPress for the measly price of $3 million. That’s 0.27% of the original sales price.
You can look at this as a typical corporate failure. Yahoo massively over-valued Tumblr; Tumblr was full of nerds who famously hate ads; the nudity ban caused a 30% drop in the number of blogs.
Or you could look at it another way. By working together to make the site inhospitable to advertisers, a bunch of Tumblr users managed to lose Yahoo over a billion dollars over the course of six years. That’s pretty powerful.
This is a cautionary tale
I mention this Tumblr tale for two reasons: one, it’s good to remember corporate overlords can lose a catastrophic amount of money. They’re not infallible, and there are consequences for their mistakes. Two, there is more than a passing resemblance to Elon Musk’s recent purchase of Twitter, which amounts to twice as much as what Zuckerberg paid for WhatsApp and Instagram combined.
I won’t pretend I understand why Musk bought Twitter for $44 billion. It has a smaller user base than Tumblr did when Yahoo bought it. In my opinion, the only reason Twitter remains relevant today is that journalists keep treating individual tweets as news and data.
It may be because Musk is richer than God, so he just can. It may be for a meme. It may be to kick Chelsea Manning off the platform (Chelsea Manning is dating Grimes, who is Elon Musk’s ex.) It might be a smart business decision. I don’t know. But I do know that he may have overextended himself financially.
Musk’s net worth is $200 billion, but much of it is tied up in Tesla stock. “According to securities filings, Mr. Musk is paying with $13 billion…