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Tumblr’s slow evolution forces Yahoo to write down value by two-thirds

Social blogging platform Tumblr is the latest casualty of its parent company Yahoo’s unrelenting financial woes.

In its earnings report for the April-June quarter, Yahoo announced a positive outcome for itself by beating Wall Street’s revenue expectations. However, it’s safe to say that it has pretty much dropped the ball when it comes to Tumblr.

Amid the crescendo of speculation around its eagerly awaited sale process — for which an update was not provided — Yahoo quietly slipped in a bombshell about Tumblr: the platform recorded a “goodwill impairment charge” of $482 million. Despite dressing up the statement in financial lingo, what Yahoo is fundamentally stating is that it has once again written down Tumblr’s value.

Yahoo’s $1.1 billion purchase of Tumblr in May 2013 still ranks as its biggest acquisition of all time. Since then, however, its growth has stalled with analysts claiming that by 2020 the gap between the platform and its rivals will widen.

Aside from concerns over Yahoo’s upcoming takeover and the effects that will have on Tumblr, the service is facing an assault on all sides from competitors. The likes of Snapchat, GIPHY, and Medium have swooped in to nab portions of its once-diverse user base. Tumblr has also failed to address mobile audiences, with its app nowhere to be seen on the iOS App Store charts.

Related: Twitter, Yahoo reportedly considered what would have been a blockbuster merger

The $482 million depreciation follows a previous write-down of $230 million — the two combined indicate that Tumblr’s total market value has plunged by over $700 million, or two-thirds of its original asking price.

It may seem like alarming news for fans of the once ubiquitous social blogging service — which was known for serving up everything from humorous GIFs and viral memes to insightful cultural articles and online activism — but the writing’s been on the wall for a while now.

There has been some good news of late that, at least, shows signs of life within the company. Tumblr recently launched a live video feature that saw it play catch-up with rivals Facebook, and Twitter. It has also pushed out some major updates to its app over the past year, including a GIF maker, and instant messaging tool.

Alongside the Tumblr write-down, Yahoo also stated that its revenue dropped 19 percent from a year earlier, and its net loss totaled $440 million for the second quarter.