Tumbled

Tumblr is being sold for $3 million, a 99.7% destruction of the $1.1 billion Yahoo paid for the porn site in 2013. When the previous sentence said “porn,” you were shaken. Why? Because the nice people who backed Tumblr (Union Square Ventures, USV), before they sold their shares, advertised the platform as something much more benign, worthy of Tide ads. No, it was a porn site. 22-28% of users were seeing adult content, and after USV sold their shares, when they found religion and opted for censorship, porn was banned and traffic declined by a third in just three months. 

“People don’t choose between things, they choose between descriptions of things.”
            —Daniel Kahneman, behavioural economist

Last week there was a ton of navel gazing and forensic analysis about “what happened to Tumblr?” Nothing happened to Tumblr. In 2014 I said Tumblr was the worst acquisition of the decade. I wasn’t prescient, I could just do math — they had negligible revenues, and much of their content was porn. Would P&G or Kellogg run ads next to porn? 

Kara Swisher, my co-host on the Pivot podcast, doesn’t agree it was a platform for porn: “Safe havens to express sexuality aren’t always porn.” And WSJ’s Christopher Mims (he’s disco) wrote, “Tumblr quickly became one of the dominant, if hard-to-navigate, social networks of the early aughts. It attracted users who made and shared memes, art, their random thoughts and, eventually, a sense of community.” 

So maybe Tumblr was a hive of creativity. But in 2014 the largest share of advertising on Tumblr was from “Adult Advertisers,” accounting for 11% of spend and 11% of impressions. 22% of Tumblr users were using it for NSFW content. 22.37% of Tumblr’s referral traffic came from pornographic websites, and 8% of Tumblr’s outgoing referral traffic could be linked to adult sites.

Who was “extremely interested” in acquiring Tumblr in 2019, even after its adult content was banned? PornHub. 

As a culture, we are much easier to fool than convince we’ve been fooled. And yes, we were fooled. Yahoo didn’t mess it up, neither did Verizon. This was a porn site wrapped in creative paper that David Karp and Fred Wilson pumped and dumped to a desperate CEO of an aging internet firm, gasping for new-economy oxygen, for $1.1 billion. A firm with no IP, technology, revenues, or leadership.

“Elites”

I’ve been thinking a lot about how and why we, progressives, may lose the 2020 election. We on the left are repeatedly referred to as “elites.” I’m not entirely sure what that means. My best guess is it’s a form of hypocrisy wrapped in virtue signaling. (I detest this because deep down I know I’m often guilty of it.) It’s being offended by adult content after you’ve received $250 million from a $400,000 investment in a porn site (see above: Union Square Ventures). Btw, who has registered a greater IRR/return from porn, in the history of business, than Union Square Ventures?

It’s constant virtue signaling about the offenses of Donald Trump after selling your shares in Twitter, the platform that continues to enable him despite blatant TOS violations. It’s being a founding member of Facebook’s Libra Association. I trust, based on past behavior, that after registering an economic gain on Libra/crypto, USV will write several blog posts with concerns about Facebook’s role in the three steps to tyranny:

• control of the media
• control of money (Libra)
• control of the military

We lose the election by howling at the moon about poor water quality at night, and pissing in the well during the workday. Bark, USV, bark.

Life is so rich,