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Illustration: Sarah Grillo/Axios

When Yahoo bought Tumblr in 2013 for $1.1 billion, its press release included a "promise not to screw it up." We could almost call that a tell, except it was really Yahoo asking if 4 in a row could count as a straight.

Why it matters: For Verizon, selling Tumblr was a fire sale for tax purposes. It also was another way to unload media assets that don't seem to interest Hans Vestberg, who became CEO after the Yahoo purchase. Yes, Yahoo screwed it up. But Verizon did no better.

Context:

  • Yahoo wrote down nearly half of that purchase price just 3 years later and then sold itself entirely to Verizon in mid-2017. In short, Yahoo never managed to leverage Tumblr's data in the way that Facebook did with Instagram ⁠— a pretty good comp given the timing, price and sector.
  • Verizon yesterday sold Tumblr to Automattic, the parent company of blogging platform WordPress. No financial terms were disclosed, but multiple sources tell Axios that the price was around $3 million. Or, put another way, well less than 1% of what Yahoo originally paid.
  • Automattic also will take on the entire Tumblr workforce, with a source saying that puts its post-close costs at around 20x the purchase price.
  • Tumblr still hosts around 450 million blogs.

What they're saying: We hear there were other bidders, although it's unclear if Pornhub was among them. The smut streamer had expressed interest back in May, after Verizon banned porn from Tumblr and put the business up for sale.

  • In terms of comps, the best I can come up with is Bebo, a social network AOL bought for $850 million in 2008, which it then sold 2 years later for just $10 million to a private equity firm (which later sold it to Bebo's founder for around $1 million).

For Automattic, which is viewed by Wall Street as an IPO candidate, it's about adding a consumer-facing business and large existing user base (or at least just Taylor Swift).

  • Axios' Sara Fischer notes that Autommatic rival Squarespace, which also wants to go public in the next year or two, has spent big money on consumer-facing marketing campaigns to beef up its numbers. Adding Tumblr helps Automattic keep pace there.

The bottom line: One of the fastest ways to lose $1 billion in value is to be sold for just over $1 billion.

Go deeper: An exclusive club of media unicorns survives media industry turmoil

Go deeper

18 mins ago - World

Hong Kong judges return guilty verdict in first security law trial

Activist Tong Ying-kit arrives at the West Kowloon court in Hong Kong in 2020. Photo: Isaac Lawrence/AFP via Getty Images

Tong Ying-kit, the first person to be charged and tried under Hong Kong's national security law was found guilty of terrorism and inciting secession by three judges Tuesday, per Bloomberg. The 24-year-old had pleaded not guilty to the charges.

Why it matters: The law passed by the ruling Chinese Communist Party last year carries the maximum sentence of life imprisonment. Security law judges are selected by Hong Kong CEO Carrie Lam.

Details: The charges stem from allegations that he drove his motorcycle into police officers while carrying a protest flag stating "Liberate Hong Kong, revolution of our times" on July 1 last year — one day after Beijing imposed the law on Hong Kong after months of pro-democracy protests, AP notes.

Go deeper: Beijing's national security law takes a toll in Hong Kong

Editor's note: This a breaking news story. Please check back for updates.

Updated 1 hour ago - Sports

Olympics dashboard

🎾: Naomi Osaka eliminated from Olympic tennis tournament

🏊‍♀️: Teen swimmer Lydia Jacoby wins first U.S. women's Tokyo Games gold

✊🏿: Costa Rican gymnast pays tribute to Black Lives Matter in Olympic routine

🥇: Weightlifter Hidilyn Diaz wins the Philippines' first Olympic gold

🤖: The robot Olympics

🌡: Heat wave brings scorching temperatures to Tokyo Olympics

Go deeper: Full Axios coverage - Medal tracker

Updated 2 hours ago - Sports

Naomi Osaka eliminated from Olympic tennis tournament

Czech 42nd-ranked Marketa Vondrousova (L) shakes hands with Japan's Naomi Osaka after their Tokyo 2020 Olympic Games women's singles third round tennis match at the Ariake Tennis Park in Tokyo on Tuesday. Photo: Giuseppe Cacace/AFP via Getty Images

Naomi Osaka was eliminated from the Olympics after losing her Tokyo tennis tournament match 6-1, 6-4 in the third round to Czech Marketa Vondrousova on Tuesday.

Of note: Japan's Osaka is the women's world No. 2, while is Vondrousova ranked No.42.