B4| Saturday/Sunday, August 17 - 18, 2019 ** THE WALL STREET JOURNAL.**
PERSONALBOARD OF DIRECTORS
The trusted advisers of top business leadersSONYA REVELL FOR THE WALL STREET JOURNAL
dia, of course—such as the newspa-
per you’re reading now—and the
response was a massive shift away
from display advertising and to-
ward subscription revenue.
But actually charging people to
access its services was never really
an option for Tumblr, built as it
was primarily on the hopes, dreams
and countless blog posts of teens
all over the world. Kids often don’t
have credit cards, and even if theyTumblr and the Death
Of the Old Internet
With an adult-content problem and only the vaguest idea how to make
money, Tumblr was easy prey for trends bigger than itselfKEYWORDS| CHRISTOPHER MIMS
talent, the most advertisers, the
most eyeballs and the most part-
ners, riding a flywheel made of
cash that spins faster and faster.
Yahoo, which hemorrhaged tal-
ent throughout the 2010s at both
the engineering and executive level,
couldn’t attract and retain the sort
of people that could help its reve-
nue-generating engine, that is its
ailing ad network, to compete.
More or less the same thing oc-curred once Yahoo joined AOL,
sorry, Oath—oh wait, I mean Veri-
zon Media—whose parent company
essentially wrote down its entire
value to zero in late 2018. Eyeballs,
which this combined network had
plenty of, weren’t enough in a cli-
mate in which advertisers had
moved beyond the kind of cut-rate
programmatic display advertising
its sites were running.
The same thing happened in me-EXCHANGE
At its apex, Tumblr
had more users than
both Instagram, now
estimated to be worth
close to $200 billion
to parent Facebook,
and Pinterest, which
has a market cap of nearly $18 bil-
lion. In 2013, Tumblr sold to Yahoo
for $1.1 billion. On Monday, the par-
ent company of WordPress.com
bought it for a pittance.
The precise amount is hard to
pin down but insiders have ob-
served that there are modest
homes in Silicon Valley that might
be comparable in price. Marissa
Mayer, Yahoo’s former chief execu-
tive, once described Tumblr as an
“incredibly special” property with
“105 million different blogs, 300
million monthly unique visitors and
120,000 sign-ups every day.”
“We promise not to screw it up,”
she famously added. And now look
where we are.
Tumblr was ostensibly a blog-
ging site, but it quickly became one
of the dominant, if hard-to-navi-
gate, social networks of the early
aughts. It attracted users who
made and shared memes, art, their
random thoughts and, eventually, a
sense of community. Its mecha-
nisms were opaque to outsiders:
For many years, it didn’t have a
function for direct messages or
even traditional commenting, forc-
ing users to communicate with
each other by, among other things,
reblogging each other’s posts.
Since it was difficult or impossi-
ble for outsiders to insert them-
selves into conversations, and be-
cause it was and still is a place that
allows pseudonymous accounts, the
site felt safe for members of mar-
ginalized communities, says Alex-
ander Cho, a postdoctoral fellow at
the University of California, Irvine,
who coedited a forthcoming book
on the history of Tumblr.
“Tumblr can be as anonymous as
you want it to be, and that allows
people to share in a way they
might not on Facebook,” says Cath-
erine Holderness, Tumblr’s senior
community trends analyst.
But inherent in Tumblr’s struc-
ture, culture and even code base
were, from the beginning, problems
for any potential owner. On the
business side, it operated under the
assumption that it could make
money off its users the same way
people had since the invention of
the banner ad: Build a big enough
audience, and “monetization” will
take care of itself.
Alas, Tumblr was inherently ill-
suited to advertising, says Katrin
Tiidenberg, a social-media re-
searcher at Tallinn University in
Estonia who has studied Tumblr for
years. Its impenetrability was a
challenge to advertisers. On top of
that, many of its users interspersed
their posts on various fandoms, ob-
sessions and memes with sexual
content. “A lot of advertising cli-
ents, particularly in the U.S., get
disproportionately nervous about
being seen next to someone’s
boobs,” says Dr. Tiidenberg.
Advertisers instead turned in-
creasingly to the ostensibly safer
realms of Google and Facebook. To-
gether, the two giants now suck up
57% of all digital ad spending, ac-
cording to eMarketer. In addition to
owning the biggest ad networks,
their crown jewels are incredibly
sophisticated advertising engines
that drive measurable results for
advertisers.
As these titans matured, they
could attract the best engineeringLess than a year after José Cil
secured a regional-manager job
at Walmart Stores Inc., the for-
mer Burger King executive got a
call from the new head of his old
company. Daniel Schwartz, the
CEO installed by private-equity
firm 3G Capital LLC to shake up
the fast-food chain, was trying to
lure him back. “I thought it was
crazy. I had just left,” Mr. Cil said.
Mr. Cil returned, and he credits
Mr. Schwartz with changing his
career’s trajectory and teaching
him the importance of personal
involvement in hiring. As the new
chief executive of Restaurant
Brands International Inc., Mr. Cil
says he seeks counsel from ad-
visers about the right questions
to ask. —Heather HaddonAge: 50
Family: Married, with a 22-year-old
daughter and 18-year-old son
Education: Tulane University, B.A. in
history, political science; J.D. from Uni-
versity of Pennsylvania Law School.
What is your favorite book?
“Moneyball.” “I like it for the sports
and analytics and figuring out [the]
way through numbers.”Jim Hyatt
Chief Executive
Officer, California
Pizza KitchenMr. Hyatt was
Burger King’s
chief operating
officer when he
encouraged Mr.
Cil to shift to op-
erations from le-
gal. He has in-
stilled the
importance of
keeping franchi-
sees happy to
stay profitable in
a fast-food com-
pany, Mr. Cil said.
“He’s instilled in
me how impor-
tant it is to ap-
preciate and re-
spect what
franchisees do.”Daniel
Schwartz
Co-chairman of
Restaurant
Brands’ boardWhen Mr.
Schwartz called
upon him to re-
turn to Burger
King, Mr. Cil said,
the burger chain’s
new owners
didn’t know much
about running
restaurants, but
they understood
the importance of
tapping talent.
“The most power-
ful resource to
bring in talent is
me, it’s Dan, it’s
us. We are our
own chief people
officers.”Father
Guillermo
“Willie”
Garcia-Tuñon
Belen Jesuit
Preparatory
School president,
Jesuit priestMr. Cil and Father
Garcia-Tuñon at-
tended the same
Miami Catholic
school founded by
Cuban immigrants,
and he turns to
the priest for coun-
sel on “major fork-
of-the-road deci-
sions” in life. “He’s
been instrumental,
not so much in
telling me what to
do, but guiding
me through his
questions.”Elsie
Romero
Chief Administra-
tive Officer,
Restaurant
Services Inc.Ms. Romero hired
Mr. Cil for his
first counsel job
at Burger King,
and has helped
him understand
the importance of
emotional intelli-
gence since, he
said. “I didn’t un-
derstand the
power of relation-
ships and connec-
tions,” he said.
Ms. Romero led a
forum at Burger
King that helped
women advance
at the company.ROBERT NEUBECKERJosé Cil
CEO, Restaurant Brands
International Inc.do, they’ve been raised on a steady
diet of free games, free video and
free services.
It also doesn’t help that Tum-
blr, never a very polished or par-
ticularly reliable service to begin
with, had a hard time going mo-
bile. That’s where Google and
Facebook ended up moving—
quickly, through acquisitions and
manic development—to maintain
their revenue growth.
“The site was just fundamentally
broken; it broke all the time” says
Klaudia Amenábar, a senior media
producer and comics vlogger who
is also a self-described Tumblr
power user. Now 24, she found the
service at 16 and has been on it
ever since, building a career in fan-
doms and social media from what
she learned there. “The mobile app
is a lot better now, but before,
jokes about the mobile app were
rampant on Tumblr,” she adds.
In the past year, Tumblr’s traffic
has dropped by more than 40%,
from about 640 million visits in
July 2018 to around 380 million
now. Much of that drop happened
after the service implemented a
ban on adult content.
Before the ban, Tumblr grew
large precisely because, like the in-
ternet, it was open to the point of
occasionally being seedy. The fact
that it was riddled with adult mate-rial might have been a draw for
some audiences and a turnoff to
others. Its parent company Verizon
launched a mostly automated effort
to purge the service of all adult
material, a dragnet that also elimi-
nated much of the user-curated and
user-generated content on the site.
At that point, the site collapsed, as
its massive communities of fan-fic-
tion writers, outsider artists and
moody teens led their own exodus
to other platforms.
“It was a long time coming,”
says Ms. Amenábar. “A lot of peo-
ple just stopped using it because
they got older, Twitter became
more popular, Instagram became
bigger.”
Tumblr, still a powerful engine
of internet memes and other
ephemera, is potentially retro-cool
but certainly not as cool as it was
during its heyday. It’s like an old
car that might become a classic if
its owner can hang onto it long
enough. That’s why its perch in the
same family as WordPress.com is
entirely appropriate.
WordPress.com is committed to
supporting an activity—blogging—
that can seem quaint in an era
where if something isn’t shared on
social media, it didn’t happen.
It’s entirely possible, as we saw
with vinyl, wooden toys and email,
that blogging—and, by extension,
Tumblr—could make a comeback,
or at least hang on as a valuable
place for more thoughtful creation
and engagement.
The real scandal of Tumblr isn’t
that it’s now worth a fraction of its
former selling price. The scandal is
that Tumblr was ever valued so
highly at all. Having a very popular
product and only the vaguest idea
how to make money on it doesn’t,
it turns out, a world-changing busi-
ness model make.The assumption was
that if you had enough
eyeballs, ‘monetization’
would take care of itself.