Mullenweg: ‘Biggest Failure’—$7.5B Crisis, Tumblr, & WP War
Summary
Automattic CEO Matt Mullenweg admitted at WordCamp Canada 2025 that the 2019 acquisition of Tumblr is “probably my biggest failure or missed opportunity.” The purchase has become a persistent cost centre: migrating Tumblr’s c.500 million blogs to WordPress has proven technically immense and financially draining. At the same time, investor confidence has fallen sharply—BlackRock has marked down its stake significantly since 2021—and Automattic is embroiled in a high-stakes lawsuit with WP Engine that could reshape the economics of the open-source WordPress ecosystem.
Author style: Punchy — this isn’t just boardroom drama; it’s a turning point for how the open web is funded and governed. Read closely if you care about WordPress, hosting economics or open-source survival.
Key Points
- Tumblr remains a costly burden: migrating over 500 million blogs to WordPress is a major technical and financial challenge that Automattic has effectively postponed.
- Profitable units like WooCommerce and Jetpack are subsidising Tumblr’s losses, dragging on overall margins.
- Automattic’s valuation has slumped since 2021 — BlackRock marked down its stake by roughly 63%, signalling deep investor concern.
- The lawsuit with WP Engine centres on whether commercial hosts profit from the community-built WordPress without adequately supporting the ecosystem; legal outcomes could set wide-reaching precedents.
- Mullenweg’s immediate priorities are clear: control costs, decide Tumblr’s future (migrate, restructure or divest), and defend the open-source ecosystem legally and institutionally.
Why should I read this?
Short and blunt: if you use WordPress, host sites, build plugins, or follow platform economics, this affects you. The piece explains why one acquisition, investor write-downs and a courtroom fight could change who pays for the open web — and how it operates. We skimmed the drama so you can get the essentials fast.
Context and Relevance
This story sits at the intersection of platform engineering, investor sentiment and open-source governance. Large platform migrations are notoriously hard and expensive; investor markdowns reflect scepticism about long-term profitability; and the WP Engine litigation could redefine commercial behaviour around community projects. For developers, hosts and businesses that rely on WordPress, the outcomes will influence hosting costs, contributor incentives and the broader health of the ecosystem.
