How is Automatic going to make money from the Tumblr acquisition ?
Tumblr has a critical mass of people spending time there already, and by taking some of what Automatic loves about privacy and user-centricity and combining that with a network could be very powerful.
Matt says Automatic does not need to turn Tumblr into a privacy nightmare in search of advertising dollars. They will try a trusted subscription model on Tumblr instead.
Also, there are things like selling domains and upgrades and other things they have done for 10-plus years on Wordpress which could be interesting to the Tumblr community. They might even try a pay-to-support model, where members could sponsor creators on recurring basis.