
Yahoo looking to acquire Tumblr? - atilev
http://news.cnet.com/8301-1023_3-57584967-93/yahoo-tumblr-tie-up-in-the-works/
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shortformblog
As a pretty heavy Tumblr user (I run a news site there with nearly 100k
followers) I'm extremely bummed-out by this news, partly because it seems like
a terrible fit and could hurt the dynamic of the product significantly.

On the other hand, Tumblr has been bad about monetizing its product in a way
that benefits both its users and itself. (David Karp is on the record as
saying that he doesn't want to impose a revenue model on users—something he
says would hurt creativity—most recently at GigaOm's paidContent Live
conference.) I could see Yahoo taking over Tumblr and being more flexible on
this front, which could be a good thing for Tumblr creators, many of which
have been forced to troll for traffic on other networks despite the fact that
their base is on the Tumblr dashboard.

Having attended that conference, it didn't seem clear to me that Karp had a
lot of answers as to how to improve the monetization situation for both the
company and end users (they've been pushing a blanket ad model that isn't
targeted but is focused on exposure-style marketing), so it could be good on
that front.

But on the other hand, this community already has a lot of frustrations with
the way Tumblr is operated, and a purchase like this could scare much of that
audience away.

I'm sure an exit at this point makes sense for the company. But the whole
thing sort of bugs me.

~~~
shuri
Would you pay for tumblr / any premium features?

~~~
shortformblog
Yes. Among them: Analytics that gave me some granular details on the path of a
reblog. Ways to promote content that didn't annoy users (i.e. pinned posts).
Security services to protect my site (two-step authentication, the ability to
use something like Cloudflare). And group functionality on primary accounts,
something Tumblr has never offered despite the fact that users have long asked
for it.

I'd pay $20 a month for extra features, considering that's still less than
what it'd cost me to host a similarly-sized Wordpress site and not have it
crash on me during a traffic surge.

------
seldo
This would be a really great idea for Yahoo. Their business model is selling
ads on content, and the growth of mobile is leaving them behind. Tumblr
generates enormous volumes of content and is making the majority of its
revenue off mobile advertising already. In addition, Yahoo's demographics skew
old, while Tumblr's are much younger.

It's less clear why it would be a good idea for Tumblr, other than being a
really great exit for their investors and early staff -- but at the right
price, that could be enough, which is probably why the number we're hearing is
so large.

The biggest risk for both parties is Yahoo somehow killing Tumblr by starving
it of resources (like they did with Flickr, and arguably with Delicious). I
think Marissa Mayer is smart enough to learn from that mistake -- she has been
pouring resources into Flickr, although it's probably too late to save it.

(Disclosure: I am a former Yahoo)

~~~
minimaxir
_In addition, Yahoo's demographics skew old, while Tumblr's are much younger._

The "younger" part of that equation isn't a good thing. If Yahoo makes _any_
changes to Tumblr, the userbase will respond violently.

~~~
seldo
I don't see why Yahoo would make any visible changes to Tumblr[1]. They care
about the ad inventory; if they are smart they will leave the actual form of
the site up to the people who invented it.

[1] although, as with Flickr, any changes that people don't like will
thenceforth be blamed on Yahoo, whether or not it had anything to do with them

~~~
ryanglasgow
If they acquire the company, they'll need to monetize it which is a
significant visible change. Tumblr's core demographic is notorious for
responding to advertising very poorly, and the founder is clearly
disinterested and clueless when it comes to monetization.

~~~
tytyty
This is a dated sentiment. According to this Forbes article Tumblr is on track
to make $100 million in revenue this year.

[http://www.forbes.com/sites/jeffbercovici/2013/01/02/tumblr-...](http://www.forbes.com/sites/jeffbercovici/2013/01/02/tumblr-
david-karps-800-million-art-project/)

Tumblr has actually managed to pull off ads very, very tastefully. With brand
and product recognition and well thought out ad-campaigns that feel like a
part of Tumblr rather than banner ads.

------
smacktoward
_"One of our challenges is we have had an aging demographic," said CFO Ken
Goldman. "Part of it is going to be just visibility again in making ourselves
cool, which we got away from for a couple of years."_

Finding out that a company's management thinks "cool" is something you can buy
strikes me as an excellent signal for shareholders that it's time to sell.

~~~
fixxer
All billion dollar companies, no matter how creative, degenerate into the
"grow through acquisition" model. I just find it funny how well Yahoo under
Mayer fits this paradigm, while Google (IMO) masks it better.

~~~
yuhong
Mayer is just beginning to try to fix the company.

~~~
fixxer
What will her Act II look like? So far, we've seen a few questionable
acquisitions and some fluff policy changes. I don't get it.

~~~
pyre
Not all of her actions are going to be broadcast throughout the tech
blogosphere.

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droithomme
How many of these sorts of acquisitions by yahoo have resulted in anything
other than destruction of the value of the service?

Geocities was the tumblr of its day.

Buying a shiny popular thing without reasonable and specific plans, getting
bored with it, and then shutting it down or just letting it languish is not a
good use of capital.

~~~
bayouborne
I think it's good that Yahoo's trying to diversify. The problem, is that
Yahoo! is like that destructive little girl w/braces in 'Finding Nemo', benign
neglect (Flickr) to worse (Delicious) typically await the quality properties
they acquire. Can't they fixate on something else instead of sites I care
about, please?

Marissa, there's a wonderful property called Experts Exchange - it gets a very
high buy recommendation from me. There's also Ask.com - both great websites
and perfect complements to Yahoo's growing stable of excellence..

Just please, leave Tumblr alone. Let it live.

------
riggins
Lots of expensive acquisitions.

Was Mayer known for being good at capital allocation/m&a at Google? I've got
the feeling this isn't going to end well.

~~~
MichaelApproved
I agree that I don't think it will end well but their stock price has been
going up so these expensive acquisitions are paying off, at least in the short
run. It's also making these "expensive" acquisitions, not so expensive since
they have more capital to use.

They _must_ integrate these assets quickly and do it well or it'll be over for
Yahoo. Historically, successful acquisitions on a large scale have not been
easy to do.

~~~
msellout
Why would the increase of the stock price increase Yahoo's available capital?
Are they making acquisitions via stock swaps? Is their cost of capital
decreasing?

~~~
pyre

      | Are they making acquisitions via stock swaps?
    

That's one way. There are ways for Yahoo! to create more stocks and sell them,
or sell stocks that are currently held by the company.

------
SODaniel
I am thoroughly unimpressed by Marissa Mayer at this point. Yahoo is doing
nothing but keeping up their 'trend' of buying too early or too late.

Tumblr while a great asset is going to be FAR to expensive to pay off for
Yahoo at this point, and a lot of the junior assets they have purchased have
no or little direction.

In my opinion Yahoo is on a quick slide towards 'AOL territory' where they
have to slim down to their 'core' to make any money and will likely suffer
innovation starvation until they are almost totally irrelevant.

~~~
john_w_t_b
If you owned Yahoo stock, you might be more impressed. The price has risen
nicely since Marissa joined.

Check out their weather app for mobile. It has high-resolution photos of your
city in relevant weather.

[https://itunes.apple.com/us/app/yahoo!-weather/id628677149?m...](https://itunes.apple.com/us/app/yahoo!-weather/id628677149?mt=8)

------
hamburglar
Well, just about everything about Tumblr seems crufty, unusable, and poorly
thought out to me, so I guess having it murdered by a Yahoo acquisition
wouldn't be all bad.

~~~
holic
Care to elaborate? I love Tumblr's approach (though not necessarily the
content it attracts) to blogging.

~~~
nwh
I'm assuming that _hamburglar_ is talking about the backend that Tumblr relies
on, and it's not pretty. They had big troubles with stability at one point
last year, including a typo in VIM on a production server that spat out all of
their API keys to every user.

[https://gist.github.com/zachinglis/29c5c5970d1f3313abd1/raw/...](https://gist.github.com/zachinglis/29c5c5970d1f3313abd1/raw/9fdb9a15feee6528a43ea3c7b16dc5423b01f92b/gistfile1.txt)

~~~
graue
I've seen that leaked PHP code before... does anyone have a link to the full
story to go with it? Was it really only last year?

The code is scary in so many ways. I assumed it was from Tumblr's early days
and they long since fixed it up.

~~~
nwh
I'm not sure if there is any official story, but it is clearly somebody
messing up with `vim` on the production servers. They've tried to go into
insert mode, failed, and not realised their mistake until after they've
written the file. If I remember correctly, this output was the response to
every tumblr request for about 15 minutes before anybody noticed and fixed it.

    
    
        i?php

------
kylelibra
In a world where Instagram is worth $1B, Tumblr would be a bargain at that
price. It fits nicely into Yahoo's content strategy. I like it.

~~~
argonaut
On the contrary, Instagram was probably a much more valuable company from a
pure user growth + engagement perspective.

~~~
spullara
Unfortunately it appears that Facebook was prepared to pay almost anything to
get it.

------
faramarz
If the goal is to acquire talent, and yet, keep Tumblr running, how is that
talent benefiting Yahoo's current offerings?

Add to that the relief of financial exist for most of the stakeholders, how
can you possibly keep motivated people around? This is almost reckless
spending for Yahoo! shareholders.

wtf?

~~~
nemothekid
It can't possibly be for talent. As an armchair advisor I'd have to guess that
Yahoo might be looking to buy its own social network to compete with G+ and
Facebook.

Maybe someone at Yahoo has figured out a way to monetize Tumblr or something
like Tumblr.

------
malandrew
I'm very curious to know more about the terms for all these recent
acquisitions. If I were Marissa Mayer, I would buy up a ton of the Series A
crunched startups and bring them all together under the same roof, segregated
as much as possible from any business unit that doesn't reflect the Google-
esque culture she is trying to build. Eventually, once she has enough fresh
talented bodies from acquisition, she could start moving the locus of power
and business units over to these fresh talented acquihires from the old-
timers.

I could totally see this being a convincing proposition if I were the founder
of a startup that Yahoo approaches to acquire.

------
MojoJolo
As I thought I will not be affected by this deal if it push through, I
remembered that I'm using Tumblr for my blog. I migrated from Blogger to
Tumblr because I think Tumblr is so simple. Posting a blog is just one click
(I don't remeber how many for Blogger).

With this, I think the rumored $1B acquisition price is worth it. Without a
good (or any) business model, I'm worried that Tumblr will eventually die out.
This offer by Yahoo is a win win situation for both. I really hope that Yahoo
will not destroy the Tumblr feel and environment.

I'm really excited about this. Any what will it turn out to be. And if in any
case Yahoo eventually destroys or break Tumblr, I think there will be a new
opening in the micro blogging space for young people to use.

------
rdl
If Yahoo! wanted to buy a kind of useless service to get younger users,
SnapChat would be high on my list, not Tumblr. (Vine too, but I guess Twitter
already got them). I'd make a bunch of $20-50mm buys, not one $1b buy.

------
dylangs1030
_"Of course, that was back in 1999 when irrational enthusiasm enveloped the
tech industry during the dawn of the internet commerce."_

....ha. I'd call the enthusiasm "enveloping" some startups these days to be
pretty irrational.

------
mugenx86
Yahoo sells advertising, Tumblr has users. But a $1Bn valuation is over-
inflated in today's market -- Tumblr barely broke even when they started
introducing ads last year.

~~~
D4M14N
Compared, to say, $1b for instagram? (i still dont get that)

~~~
seiji
Instagram was starting to cannibalize the facebook youth userbase. Instagram
worked its way into people's minds, vocabulary, and daily habits. The
acquisition was a defensive maneuver by the paranoid Kid in Chief.

~~~
D4M14N
Wouldn't tumblr be the logical next acquisition for Zuck then since it is
doing exactly the same.

~~~
seiji
Well, nobody knew (or knows) how big instagram will get. Tumblr has already
peaked. Also, tumblr is too anonymous to be of any value to facebook. Not much
to exploit there. I don't think forcing Real Name™ upon every tumblr would
make for a happy Internet.

------
xedarius
Where does Yahoo keep getting it's money from? I don't now anyone who uses
their platform. I'm assuming it must still be fairly popular in the US.

~~~
qompiler
Yahoo.com is the 4th most visited web page in the world just behind Google,
Facebook and YouTube.

------
tnuc
“History doesn't repeat itself, but it does rhyme.”

― Mark Twain

------
spullara
This would be great for Tumblr. What other choice do they have?

------
chourobin
Medium seems like a much nicer acquisition target.

~~~
uniclaude
Medium is good, but unfortunately it would not solve Yahoo's "aging
demographic" problem.

Everything seems to indicate that young people prefer images and other media
content to words, which is the opposite of what Medium helps and incites
writers to publish.

------
sairamkunala
Nooooooooooooo! Let Tumblr be left alone.

------
napolux
NO PLEASE! I LOVE TUMBLR!

------
aj
No. Just please NO!

------
freehunter
Way off topic, but not too far off from HN's usual commentary: I really wish
there was a way to report back to sites what I'm blocking with AdBlock. I
mean, very specific items that I'm blocking. Because with CNet, it's always
that stupid object hovering on the bottom of the page that draws my eyes away
from what I'm reading and actively reduces the visible space for the article.
And that 'x' button sitting on there? It's never worked for me, in Chrome,
Firefox, or IE on every system I'm worked on. I can never close it.

AdBlock needs to have a "Tell [site name] what you don't like!" button.

