Yahoo Pinkie-Swears It Won't Ruin Tumblr 162
Nerval's Lobster writes "Yahoo has agreed to acquire Tumblr for $1.1 billion. As you know, Yahoo is a major corporation with a need to monetize its assets in a way that makes its shareholders happy, leaving open the question of whether it'll alter Tumblr's DNA in order to make the latter more of a significant cash generator. But at least for the moment, Yahoo seems content to leave its new property alone. 'Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business,' read the company's press release. 'The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators.' Tumblr CEO David Karp, who has been known to make some very anti-advertising comments in the past, will remain in place. Even so, anyone who likes Tumblr may have some cause for concern, because Yahoo has a history of making high-profile acquisitions that subsequently implode. Back in 1999, for example, it paid over $3 billion for GeoCities, another blogging network that it eventually shut down after years of failing the update the property. In 2005, it acquired popular photo-sharing Website Flickr, which it likewise allowed to languish and die. That same year it bought Delicious, a popular Webpage-bookmarking site, and did exactly nothing with it. So when Yahoo starts off its Tumblr press release with a promise not to screw things up, it's a self-deprecating nod toward all that history. New Yahoo CEO Marissa Mayer has been on a bit of a buying spree of late, snatching up startups such as Summly in an attempt to make her company 'cool' and relevant."
Skeptical fungus is skeptical... (Score:5, Insightful)
Ok, let's take a look here: Tumblr, pre-aquisition, made $13 million in income with reported costs of $25 million. So, they are losing money, surprise, surprise...
Yahoo comes along and sinks $1.1 billion into the company. Unless they are total fuckwits(a possibility that cannot entirely be ruled out), they are going to want to squeeze that cash back somehow, whether directly by 'monetizing' the Tumblr userbase, or by some farcical theory about a halo effect drawing users to their other properties...
In what possible universe is a service that is going from "VCs are paying you to use it" to "Yahoo wants to scrape 1.1 billion dollars out of you" going to improve? At best, it might improve in an absolute, technical, sense; but be accompanied by a subscription fee or something. More likely, we'll start to see increasingly aggressive frog-boiling attempts at upping the advertising, theme microtransaction, and other revenues.
They might realize some incremental efficiencies in terms of web hosting costs, given Yahoo's volume and datacenter operations experience; but unless Tumblr's previous management was wholly incompetent, they were probably already using the cheapest commodity web platforms they could get their hands on, so I find it very hard to believe that there is enough fat to cut to magically fix the situation without end-user pain.
Let's hold on a sec. I see what's she's doing. (Score:5, Insightful)
Yahoo is where the Internet goes to cash out and die.
I was skeptical at first - I was thinking she was buying shit up like what's her face at HP years ago for the sake of buying shit up.
Then It downed on me. What do all of those websites have in common?
Registered users. Many of whom with real and pretty accurate personal profiles.
Merge all that data together - not hard at all - and BINGO! She's got a multibillion dollar portfolio of people's profiles for ...wait for it .... aaw man! ...
Yeah, that's right, for marketing shit.
She's gonna out "Facebook" Facebook.
Leave it alone right up until... (Score:5, Insightful)
It's only going to be left alone if it can make giant piles of money and Yahoo management doesn't think they can boost some other property by linking them together.
Given that Tumblr is currently not profitable and Yahoo management most definitely thinks they can use it to boost their other properties, a promise that it'll be left alone isn't worth the paper it's printed on.
Re: RIP Tumblr (Score:5, Insightful)
the VC's just got their 10x payday. what happens after that is irrelevant to them.
Re: Justice Department obtained records of Fox New (Score:2, Insightful)
Re:Geocities as a blogging site? (Score:4, Insightful)
describing Geocities as "a blogging network" is like referring to medieval town criers as social media newsfeeds.
Geocities was a free web host that provided some primitive site creation tools and injected a bunch of ads. did some people use them to create sites with regular updates? sure. but there was a heck of a lot more "chewbacca ate my balls"and "JEFFROS AWESOME PAGE OF COOL LINKS!!!! (UNDER CONSTRUCTION)" than there was anything else. i don't even think the term "blog" had been minted by the time geocities peaked.
Re:Geocities as a blogging site? (Score:3, Insightful)
Flickr is probably Yahoo!'s second most useful feature, after its Fantasy Football leagues.
Re:Skeptical fungus is skeptical... (Score:4, Insightful)
I don't see how bringing out the speculative accounting hat changes things: yes, it's an 'asset'; but it's an asset whose current rate of return is worse than what you'd get by plunking $500 in a retail-bank savings account... Unless there is a yet greater fool waiting in the wings(who wasn't willing to outbid Yahoo and acquire tumblr now...), Yahoo just turned a huge pile of liquid assets into an asset whose rate of return isn't even positive. Compared to even a low-yield, highly conservative, investement of the money, that's a lot of opportunity cost that they'll need to scrape out of tumblr somehow, probably in a way that its users won't like...
Re:Skeptical fungus is skeptical... (Score:5, Insightful)
Re:Let's hold on a sec. I see what's she's doing. (Score:4, Insightful)
I worked briefly on a site launch for a startup a couple of years ago (selling overpriced designer shit to Austrailians, basically) and the founder was absolutely insistent that people had to sign up before they were even allowed to look at any products.
His main argument in favor of that tactic was that it gives the user a sense exclusiveness... they are now part of the "club"... one of the cool kids... with accounts not automatically approved (they would have to wait an artificial amount of time) the delay helped build anticipation for looking at stuff and then being able to purchase it.
I was strongly opposed to the founder's idea, but he insisted, and I left shortly thereafter (not really because of this, however, was offered a better position elsewhere).
Last I heard, they completely changed their business model, so I am guessing their choices had failed.
Pron (Score:4, Insightful)
Re:Let's hold on a sec. I see what's she's doing. (Score:2, Insightful)
She's got a multibillion dollar portfolio of people's profiles for... tens of billions of dollars!
Doesn't seem like such a hot plan.