The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

https://twitter.com/WSJ/status/336152689211756544

by gbuckingham89 • 13 years ago

208 175 13 years ago

Assuming this is true, does the 1.1 billion in cash tell us that this is purely about the property and not in any way about the team, or is that over-reading / misreading the tea leaves?

lmm2• 13 years ago

Nope, there could still be vesting periods/golden handcuffs etc., this just means it was cash rather than Yahoo stock. It tells us that Yahoo preferred to spend cash than stock, or Tumblr's founders wanted cash rather than Yahoo stock, or a combination of the two, which can be a starting point for any amount of speculation.

sudonim• 13 years ago

How is this becoming public information so quickly? Is this being leaked? It seems like it's not beneficial for this to become public knowledge for anyone except Tumblr if they are trying to start a bidding war.

itsprofitbaron• 13 years ago

Yahoo employees can't keep secrets and are always leaking things to AllThingsD (a sister company to WSJ).

jcdavis• 13 years ago

Yahoo is leakier than most - Kara Fisher seems to know anything that happens there

randall• 13 years ago

*swisher

brown9-22• 13 years ago

This isn't an unsolicited deal, the CEO brought it to the board for approval after completing negotiations.

This is a done deal now, it's not the start of Tumblr's bidding process.

fatjokes3• 13 years ago

I suspect a big part of the reason that Yahoo! makes these acquisitions if for PR, i.e., "look! we're a dynamic company making huge moves!"

Look at Summly---how much value did they reap simply from the media coverage? They killed the software immediately, and I'm sure Yahoo! Research could've whipped up a pretty decent summarization engine at no extra cost.

dsaint• 13 years ago

They integrated Summly into their Yahoo iOS app within 30 days of acquisition. They're using it to provide summaries of news articles in the app.

minimaxir3• 13 years ago

I'd recommend watching the #yahoo! feed on Tumblr in order to watch the Tumblr community's reaction, and see the inevitable hilarity.

(Not providing a link due to high probability of NSFW content. Search for #yahoo! on Tumblr.)

lucisferre• 13 years ago

They've started a petition... http://www.ipetitions.com/petition/stop-yahoo-from-buying-tu...

_ak3• 13 years ago

Has any internet petition ever worked?

ricardobeat3• 13 years ago

Already at 150k. Looks like Yahoo made a good purchase!

kawsper• 13 years ago

Link to copy (HN doesn't like ! in links): http://www.tumblr.com/tagged/yahoo!

minimaxir3• 13 years ago

Another reason I didn't put a link even with a caveat is because link parsers don't like exclamation marks. But it looks like the non-exclamation mark feed today wasn't as bad as yesterday, so proceed at your own risk.

jalev2• 13 years ago

And like everything else that happens via Tumblr, this entire series of events will be forgotten in less than a week, regardless of the outcome.

pavs5• 13 years ago

Same is true for Twitter, Facebook and Reddit.

ricardobeat3• 13 years ago

    Please sign this petition! [...] we can do this. We got a 
    girl a goddamn fluffy chicken, and took over the Internet 
    with the Mishapocalypse.

What on earth are they talking about?

Also

    no chance well be google users 5eva if you do this

TazeTSchnitzel2• 13 years ago

Mishapocalypse is something of a tumblr meme.

5eva is also a meme, although it's better known across the web (coming from a cringeworthy copy-pasted text)

ben1040• 13 years ago

It's amazing how many people here are saying things like "my tumblr represents my identity and I do not want to lose my identity to Yahoo" and "I don't want to lose the only place where I can express myself."

TazeTSchnitzel2• 13 years ago

Well, it's filled with asocial, mostly female, teenagers like myself. Those statements are fairly accurate, in some sense.

inmygarage• 13 years ago

Thoughts on why this was an all-cash deal as opposed to similar comps (Instagram, YouTube) which were cash/stock mix?

RexRollman• 13 years ago

Maybe they don't have faith in Yahoo's future?

pavs5• 13 years ago

Or maybe yahoo's stock is not as sought after like it was for google (and still is)?

keiferski• 13 years ago

My best guesses:

1. Yahoo would rather spend cash than stock (possibly because they anticipate Yahoo stock going up in the future). If Yahoo thinks that $1 in stock today will be worth $2 in 3 years, it might make more sense to spend cash. This is a huge gamble, of course.

2. Cash is intrinsically more valuable than stock; in other words $1 cash != $1 stock. Yahoo may feel more comfortable spending $1 Billion cash than spending $2 Billion stock.

3. The obvious, but maybe too obvious, answer: Tumblr doesn't see a future in Yahoo stock.

steven20122• 13 years ago

This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired.

Cash is much more valuable than stock. Any CEO worth their salt would ALWAYS issue stock and never cash, since stock is essentially free (with some GAAP repercussions, but better that then spend cash). But it sounds like tumblr wanted cash instead of cash/stock.

It doesn't matter to the employees, they get paid out from the purchase, and then will all get YHOO retention stock options when they join.

Great deal for tumblr, terrible deal for YHOO, it's a waste of cash and as someone else pointed out last week, it's reminicient of Geocities from the dotcom days. Every employee from tumblr will start exiting, maybe after 2-3 years, and the entire thing will fall apart.

I'm disappointed in Mayer.

nwenzel• 13 years ago

From the acquirer side:

Maybe they wanted to put some excess cash to work.

Cash is important when you don't have it. But once you have it, it's a dead asset that produces no meaningful return. Excess cash is important as an option on future opportunity. Apparently, Yahoo found their opportunity.

Or, maybe they didn't want to revise EPS estimates down.

An extra $1B worth of $YHOO out in the marketplace would dilutes EPS by about 3% until the revenue starts flowing.

From the acquiree side:

Opportunity vs sure thing + choice of opportunities.

$1.1B in $YAHOO today will be worth something else tomorrow. Maybe more. Maybe less. Maybe $0. Cash is guaranteed to go down in value at the rate of inflation. But not more. And they get to decide on some other opportunity(ies) to go after.

loceng2• 13 years ago

Tumblr might not have valued Yahoo! stock; They would lose control and possibility of fucking everything up is possibly high.

jamescun• 13 years ago

I wonder how this will pan out for Tumblr with Marissa Meyer at the helm. If we look at Flick (bought by yahoo in 2005), it hasn't seen much innovation or new features in the last 8 years and has been mostly coasting. I wonder if this will be the case for Tumblr under Marissa's leadership.

dave5104• 13 years ago

And wasn't one of Marissa's plans when she came aboard to try and revive Flickr, since she saw it as a big asset? Not that it's jumped leaps and bounds since then, but I would think that she'd want to nurture tumblr a bit.

pavs5• 13 years ago

According to the verge there is a flickr redesign coming up soon: (check update2: http://www.theverge.com/2013/5/17/4341144/yahoo-to-hold-mond...)

greghinch• 13 years ago

The updated Flickr iOS app is pretty awesome, and exactly what Flickr needed.

jalev2• 13 years ago

Maybe Yahoo's involvement with Tumblr will be limited, much like Conde Nast's management of Reddit.

pavs5• 13 years ago

Then it would defeat the purpose of the acquisition. Perhaps a middle ground? Initially limited involvement, slowly integrate feature/traffic to other yahoo property in a way that doesn't devalue current tumble experience but also gives yahoo a younger crowd as their userbase.

Its obviously very hard thing to do, but I am (probably the only one in HN) rooting for Yahoo. Tired of 2-3 companies dominating the tech world. I am rooting for Marissa Mayer to succeed and give others a run for their money by doing an epic u-turn with yahoo and changing everyone's perception of what yahoo is usually associated with.

technoslut4• 13 years ago

It'll have integration with Yahoo's own services but it also presents a few more headaches with pirate links and takedown notices.

larrys2• 13 years ago

"it hasn't seen much innovation"

For the existing team at tumblr (say anyone who has stock that is) things like this end up being a buzz kill after it settles in. Working towards something is fun and motivating. Once you get it things simply change (speaking from personal experience and observation here (also as you are pointing out).

For example, would you like to get paid now for all the work you are going to do for the next 10 years in advance and still find it as fun and challenging? If you were an athlete would you want to know in advance that you were going to win 2 medals in each of the next olympics? To me that takes the fun out of things. I think it's obvious why things are different after money changes hands.

In this situation how do you show up for work at twitter and still be creative after essentially the "game", if you want to call it that, is won? You will probably itch to get over to a new challenge. Not to be cliche but the journey is a big part of the picture.

brown9-22• 13 years ago

You write "twitter" where you mean "tumblr".

kmfrk• 13 years ago

I share your reservations, but has Tumblr really been going anywhere the last couple of years? It's a little like Flickr in how it's calcified in development, but is still a solid product, nevertheless, albeit one that feels a bit stale.

arindone• 13 years ago

Tumblr really has blown up in terms of users and content created (anecdotal evidence from some folks I know that used to intern there) -- however their issue is they waited too long to figure out how to monetize. And to be honest the formula for monetizing requires experimentation and iteration.

rhizome5• 13 years ago

Flickr had a major interface refresh a couple of years ago, and I'm also pretty sure Flickr has lots and lots of paying customers. So, it may have already "panned out," in a "don't mess with success" sense, depending on what that means in the context of Tumblr.

technoslut4• 13 years ago

Flickr updated their site a few months ago along with the release with their new iPhone app. It still doesn't feel like a modern site and it doesn't work as well as it should.

Supposedly there is a new Flickr being shown off tomorrow and hopefully Yahoo rebuilt the site from the ground up.

copper-horse• 13 years ago

As a long term Flickr user, I can only say I totally love it. It is simply perfect for what it is and I happily pay for my pro subscription every year, and I would hate to see it change into something else because someone else thought they knew better than me what I needed.

Yahoo may be better maintainers than innovators, but I'd rather have seen posterous acquired by Yahoo and maintained than acquired by Twitter and killed.

_ak3• 13 years ago

How pre-posterous (pun intended).

mani274• 13 years ago

Yahoo hasn't done much justice to their past buyouts. I feel like this going to be a waste. Yahoo isn't doing much for their existing products. They should really focus on what they have. No doubt the apps and all have been updated but desktop UI still remains same. No consistency in UI across different products. The new ymail still isn't that great. Another thing is why can't yahoo come out with own such product - they do have some brilliant engineers.

pavs5• 13 years ago

I am thinking that the problem with yahoo is that most likely Mayer doesn't have much faith in the present crop of developers/managers. Recently she did a lot of acqu-hires, because traditionally really good developers are less likely to join Yahoo over better choices.

Maybe improving existing products and making new impressive products are in the plans for Mayer, but to get there she needs capable people and she needs to make Yahoo seems like a good/profitable/fun place to work at.

For a long term sinking ship like Yahoo I think major changes in direction will need some time.

minimaxir3• 13 years ago

Per AllThingsD, "There were no other competing bids, despite reports, to snap up the New York-based hipster blogging service."

http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...

pkmehta2• 13 years ago

Can someone explain to me why you spend $1.1B on this if the company was running out of cash, had investors skittish about funding a new round and there were no competing bids.

Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less.

What am I missing in this? I hope the answer is not that doing that would create enmity between Yahoo and Tumblr's investors or something like that? That would strike me as a gross violation of their fiduciary duty to their shareholders, no?

sharkweek• 13 years ago

Maybe if they let it die, the service slowly dies too, and then the audience leaves -- Assuming that's kind of what Yahoo is after in the first place; but I'm completely guessing here

bretpiatt2• 13 years ago

All cash does not mean there isn't a portion of it restricted to a time or objective based schedule for key employees (or even all employees and shareholders).

If they intend to continue operating it (highly likely) buying while they are still with cash, all of their staff, and vibrant is quite possibly a better outcome than buying a broken company for less even only a few months later.

Disclosure: I am long Yahoo in my personal portfolio and I've led many M&A activities for Rackspace.

diego• 13 years ago

If you and Marissa Mayer want the last burger in the world, how much is it worth? What if you're Mark Zuckerberg, and it's really important to her that you don't get a taste of that burger? Maybe she doesn't even like burgers.

Factors like the cost of the burger, or how fresh/tasty it is, become less important.

Also, all-cash doesn't mean what you think it means. The currency used to pay for a company (cash, stock, pork bellies, whatever) is independent of the vesting schedules of the employees/founders acquired. Typically investors receive most stock/cash immediately, while employees receive some up front and the rest over a period of time that is negotiable. 3-4 years is standard. Some deals are front-loaded (more than 50% in the first half) and others are back-loaded (the reverse).

jusben1369• 13 years ago

One must never look at this deal based on the acquired's metrics and dynamics. One must look at this based on the impact of the acquirer. Instagram was worth $1 billion as it was potentially a $10 billion reduction in FB's valuation at IPO with this threat hanging out there. Tumblr is worth a billion because of the strategic value to Yahoo. In this particular case Yahoo can close massive gaps in age demographics and mobile in one fell swoop. Tumblr was discussing ad revenue of $100 mil this year. Yahoo, with much deeper experience and relationships here, can probably do much better than that this year and beyond. So it may "pay for itself" within 3 - 5 years which is nice on top of all the other benefits.

Yahoo could monkey around and try and pick it up in a "fire sale" in 12 months for $500 mil. But maybe that never happens and they still wake up tomorrow well behind in the youth and mobile demographic. I love that Yahoo, after sooo many years of indecisiveness, is being decisive and bold. Not sure if it'll pay off but these seem to be well thought out calculated risks.

waterlesscloud3• 13 years ago

Also, the question isn't $1.1B or nothing, it's what amount would Tumblr say yes to?

Would they really have turned down an offer of $700 million? $800 million? Was $1.1B really the least they'd accept?

I bet they would have accepted significantly less, rumors to the contrary.

But the billion dollar headline has its own value, I guess.

mani274• 13 years ago

The rate at which Yahoo is buying out companies for talent acquiring , I wonder what must be going through minds of engineers at yahoo.

jmduke• 13 years ago

A rising tide lifts all boats.

From a recent-grad perspective, Yahoo fell far, far behind the rest of Big Tech on the desired employment scale. Part of this was for changeable reasons -- we've read in recent months about the larger offers and better perks that Mayer's been implementing -- but another huge reason is that Yahoo's workplace has a reputation for uninspiring people doing uninspiring work.

From all the anecdotes I've heard about Yahoo's workforce (and yes, I realize they are merely anecdotes) -- the subpar engineers should be worried, but the great engineers should be excited.

mani274• 13 years ago

Looks like then some major changes at Yahoo expected.

k_kelly• 13 years ago

As an outsider it looks like Yahoo is saying it will back big crazy engineering projects if they have potential. To me Yahoo went from being the last place I'd ever want to end up to being an exciting company. It's an amazing turnaround.

mani274• 13 years ago

Yahoo unlike google doesn't gives that much freedom to engineers to work on their own ideas. Engineers can't make much difference, if same managers who are not doing much now are present. Some major revamp of workforce starting with managers is needed.

Choronzon• 13 years ago

However big crazy engineering projects require money which is been sunk into dumb social purchases instead.I can imagine it killing internal engineering morale also.

waterlesscloud3• 13 years ago

Why does any of this making working at Yahoo as an engineer even a little more exciting?

All we've seen so far is external projects get big money and attention. Where's the internal projects that would make working for Yahoo exciting?

Right now I'd rather be working for a company that planned to compete with Yahoo.

Yahoo9823471• 13 years ago

It's mixed. Some are jealous of what some of these startups, like Summly, are getting paid. Others are happy to have more talented people to bolster our ranks.

I'm definitely in the latter. I've watched Yahoo lose so many great people, especially last year. This is a good thing for Yahoo.

gdilla• 13 years ago

Wow, in light of the recent (rumor?) that FB was going to snap up Waze for $1B, this seems like a steal.

SimianLogic2• 13 years ago

Seems smart--most of what I use Yahoo for nowadays is content (Y!Sports, Y!Finance), and Tumblr adds a lot of content.

elorant• 13 years ago

R.I.P. Tumblr

zaidf2• 13 years ago

This makes it pretty simple to judge Marissa Mayer's performance at least in the next year. If Tumblr shows any sign of failure, its pretty much equivalent of Marissa Mayer failing at Yahoo. If tumblr shows signs of progress not seen Pre-acquisition, it's a sign of an ex-Googler making a smart acquisition AND making it succeed in the long run.

Google is the best company when it comes to making large acquisitions work out for the parent company. Just see Analytics, YouTube etc.

Yahoo is probably one of the worst if you see how many of their 100M+ acquisitions have resulted in complete failure.

gnok3• 13 years ago

I disagree. We don't know what Yahoo wants to do with Tumblr. All we have are rumors, a WSJ report and tons of idle speculation. Without knowing what the intended end game is, I don't see how we can call the acquisition a "success" or "failure", much less the CEO's. I also don't agree that "a sign of progress" is "making it succeed in the long run".

Google is no genius with large acquisitions either. Motorola and Blogger come to mind immediately, but there are others too.

I think we can all agree that Yahoo has been mismanaged at least until recently. I just don't think a CEO's performance is a boolean value that depends on an undefined "any sign of failure" on a large acquisition with a 1 year time frame.

untog2• 13 years ago

I also don't agree that "a sign of progress" is "making it succeed in the long run".

What? How can success ever not be a sign of progress? I know Silicon Valley likes to celebrate and learn from failure, but there ought to be a limit somewhere.

zaidf2• 13 years ago

Google is a genius at acquisitions IMO. To qualify as a genius you don't need a 100% of acquisitions to work out. You do need a few to work out tremendously. Google has those. Meanwhile, what's the last yahoo acquisition that didn't turn into disappointment soon after the acquisition? We can go back 15 years and be hard-pressed to find one. On the other hand there are plenty of disaster acquisitions including broadcast.com, geocities, bluelithium etc.

patrickaljord2• 13 years ago

Google is just getting started with Motorola so it's too soon to tell and I'm pretty sure that Blogger has been a huge success (through adsense) and many successful blogs uses it. It went down though since Facebook and Twitter for obvious reasons but the same thing happened to most blogging platforms.

ISL2• 13 years ago

To know that Motorola was a poor acquisition, you'd need to know what would have happened if Google hadn't done it. Defensive/preventative decisions are sometimes undervalued.

pseut3• 13 years ago

For a random $30mil acquisition (hypothetically), there's a lot of gray area where it's hard to judge whether the overall benefit to the parent company is net positive or net negative. For a $1 bil acquisition, it's a lot easier to judge and the stakes are a lot higher.

Zigurd3• 13 years ago

Motorola stands out as a clunker. It is very expensive, even for Google. It is a distraction for management. It is a threat to Google's culture. It fails to be a stick to beat patent trolls. It has all the problems of an underperforming mobile OEM, while breeding doubt among Google's important partners. And all these criticisms were leveled by many people before Google bought Motorola. Some things really are plain to see.

So far, Meyer is doing what needs to be done to turn Yahoo into a first tier competitor. Who knows if she will succeed, but it's good to see them try.

bambax• 13 years ago

Maciej Cegłowski: "Marissa Mayer secretly named Google employee of the month for third month running".

DocG• 13 years ago

I most curious what does it mean for me, as tumblr poster. Couple of months ago I started OC artwork blog on tumblr.

Now I must probably wait until this things settles, to know is it worth investing my time or not, what changes they are going to make etc.

fatjokes3• 13 years ago

(╯°□°）╯︵ ┻━┻

lizzard• 13 years ago

This reminds me of Excite@Home buying Blue Mountain Arts and Webshots because they got a lot of hits. How incredibly not useful!

seiji3• 13 years ago

How does it feel to work at a company when it pays over a billion dollars to 20-somethings working on the opposite coast?

It's not mentally reconcilable. The only way not to go crazy is if you don't think about it at all, but that's just denying the reality of you being exploited while getting few of the benefits.

Some people say, "Well, I have 'job security!'" Is "job security," the greatest corporate-serving propaganda of our generation, really worth $800,000 per year in surrendered earnings?

icebraining3• 13 years ago

Frankly, I don't get your position.

If you believe that price should be determined by supply and demand based on perceived value, like it mostly is in these cases, then there's no exploitation.

If you believe that price should be attributed based on Labor expended, then the Yahoo! workers are already extremely disproportionately paid relative to the average worker, so it makes no sense for them to feel exploited.

How exactly are the Yahoo! workers exploited?

seiji3• 13 years ago

How exactly are the Yahoo! workers exploited?

I think that's between the employee and their own view of the world. If you worked at Yahoo for six years doing something, anything, and then Yahoo buys a six year old company run by a 26 year old for a billion dollars — what were you doing the past six years? Couldn't it have been you? Why not?

Every computer person employed by a company isn't generating a million dollars a year in value, but most could if they were pointed in the right direction. Even those who are generating 10x to 1000x the value of their salary aren't compensated proportionally (hence, why startups exist).

sethbannon• 13 years ago

This is great news for the NYC startup ecosystem, which had been lacking in the billion dollar exits that create the next generation of entrepreneur-investors.

dmor3• 13 years ago

How many of Tumblr's employees have been with the company more than a year or two? It sounds like they were only 20 employees at the end of 2010 [1] so I'm curious how many people actually got significant enough vesting to get the cash to call themselves entrepreneur-investors.

[1] http://techcrunch.com/2010/11/19/tumblr-funding-office-hires...

jcampbell12• 13 years ago

The Double Click acquisition spawned a ton of investment and led to companies like Gilt and 10gen. It will be interesting to see what Marco Arment does with a cool $100 million or so. He seems to have a golden touch. Tumblr, Instapaper, and The Magazine makes him 3 for 3.

dmor3• 13 years ago

Considering Marco left Tumblr a year before [1] they raised their last $85M round at $800M valuation [2] do you you think it realistic/possible that he had 1/8th the company after that deal?

[1] http://techcrunch.com/2010/09/21/marco-arment-instapaper/

[2] http://techcrunch.com/2011/09/26/tumblr-raises-85-million-ro...

dmor3• 13 years ago

The original headline from WSJ was “Yahoo to Buy Tumblr for $1.1 Billion” which is obviously questionable since they state in the same article that Tumblr has not actually confirmed the deal.

Now other outlets are reporting it as a done deal when it isn't. http://www.daniellemorrill.com/2013/05/in-race-to-be-first-o...

Zigurd3• 13 years ago

Yahoo has to make acquisitions like this.

There is room for more full-service Internet ecosystems. Microsoft has under-invested in their ecosystem. Or maybe they can't decide if they want a full-service consumer-oriented ecosystem.

No overseas-based ecosystems are strong enough to enter the US market. Yahoo is strong in some markets in Asia. If they can buy a couple more top brands and shine-up Flikr, Yahoo Finance, and some others, they will be in good shape.

uthgard• 13 years ago

Does anyone know how they get traction the very first time ? It's interesting how they got this far while the initial reception seems cold [1]. What kind of marketing they do ? what's the vertical ? answer from quora[2] doesnt satisfy me.

1. https://www.hnsearch.com/search#request/submissions&q=tu...

2. http://www.quora.com/Tumblr/How-did-Tumblr-get-traction

orangethirty2• 13 years ago

A business without a proper model, lack of revenue, losing money, fighting off pornography and spammers is worth 1.1 billion in cash to Yahoo. The users will flee, they always do. The engineering dept. will be hired out, it always is. All that Yahoo will have is a domain, a database filled with cats and naked people, and a real problem on its hands. Bad move, Yahoo. The way to re-build Yahoo is not to buy zombie businesses. It is to give the engineering dept. freedom to innovate.

return0• 13 years ago

As always? is this the rule? Given precedents of instagram etc, it doesn't seem like an improbable price.

However, how is tumblr fighting porn? I thought they actively encouraged it. It's a big part of tumblr for sure (and big part of the value yahoo pays for).

burgreblast2• 13 years ago

Instagram was growing rapidly and threatening FB as the place to share pics. Tumbler is declining.

imjk• 13 years ago

Yeah, we've all seen this story played out many times. It's a move that's good for the short term but terrible for the long term.

tnuc• 13 years ago

What you are describing sounds like what happened to GeoCities.

adventured2• 13 years ago

Tumblr is GeoCities, circa 2010. And that's why Yahoo purchased them of course. Nothing has changed about the nature of what Yahoo is. The only thing Mayer is doing is collecting a new group of properties to replace the stagnant old ones. It's not brilliant and it won't get the earnings flowing.

camus4• 13 years ago

I dont understand why Yahoo would need Tumblr , nor i got why they bought Summly the price they paid.

Is it to look relevant ? Yahoo has a ton of services, a ton of engineers and apps that could do better if they were made better. Yahoo still feels like it is 1999. Why not work on yahoo mail and make it relevant ? groups and make it relevant ? what about their ugly homepage ? I mean there is a ton of things to do, instead of buying things like Tumblr.

Marissa is cute and intelligent , but what's her strategy for Yahoo? At that rate , she'll be out in a year.

smegel2• 13 years ago

They need a social network. Badly. All their other services, including email, belong to a bygone era (with the exception of acquisitions like Flickr).

camus4• 13 years ago

Who do they need a social network ? are people going to move from Facebook or Twitter to Tumblr? No. They need a good an new idea , an innovative product that will draw attention. and a consistent strategy . People are fed up with social networks ( i.e. Google+ ).

Tumblr is not valuable at all for advertisers , unless you are selling porn...

What's Yahoo mobile strategy ? What's Yahoo's cloud strategy ? ect ...

I see no strategy , only buzz ...

I'm sure plenty of engineers at Yahoo have great ideas ,it's just feel like what's really broken is Yahoo's management. Why would they pay that much for Tumblr, really ?

blankenship• 13 years ago

What does cute factor have to do with anything in this thread?

“Ballmer is rotund and intelligent, but what’s his strategy for Microsoft?” sounds just as silly.

ebf2• 13 years ago

Seems like the OP's sentence has a sexist undertone to it.

ebf2• 13 years ago

> Yahoo has a ton of services, a ton of engineers and apps that could do better if they were made better.

Does buying Tumblr take away focus from their other services? I don't think Yahoo engineers working on those projects will be transfered to Tumblr.

> Yahoo still feels like it is 1999. Why not work on yahoo mail and make it relevant ?

Yahoo mail is plenty relevant. It's the 3rd largest email provider with 281 million users. And they updated it last December.

> what about their ugly homepage ?

They updated it. Also ugly != functional.

> I mean there is a ton of things to do, instead of buying things like Tumblr.

Once again, you are assuming the two are exclusive.

> Marissa is cute and intelligent , but what's her strategy for Yahoo?

What does her attractiveness have to do with anything?

camus4• 13 years ago

good ,so what product makes Yahoo relevant in 2013, Yahoo mail ? Sorry but the Tumblr deals only feels like a stunt to me.

benackles• 13 years ago

We're starting to see another destructive trend in acquisitions. First we saw a trend in acquihires. This clearly is bad for users and only serves founders interests. Now we're starting to see a trend towards acquiring relevance. For example, Facebook bought Instagram for "$1 billion" before it made any money for the sake of remaining relevant. In Facebook's defense, they bought it on a cash/stock (reportedly 30% cash/ 70% stock) deal. The stock ended up being worth much less. Yahoo buying Tumblr may work out, but it's very unlikely it will have any direct financial return on investment. The only return on investment is the slight chance Tumblr stays a relevant brand and in return keeps Yahoo's brand afloat. Yahoo needs to make some big bets, but I'm not convinced this is the right one.

What do you think would be their best bet? My guess is it would be something less trendy since most of those end up being fads. Google's best acquisition was clearly Applied Semantics; not YouTube.

adventured2• 13 years ago

This is the time to start the next Tumblr, as the last Tumblr is now dead.

For the same reason that Flickr was replaced by Instagram (and missed the entire mobile wave), Tumblr will lose traction over the next couple of years and be replaced. They'll stick around, but their traffic will fall by half in 24 to 36 months. Flickr for example has been losing traffic for two straight years.

Nothing less cool than using a Yahoo blogging site if you're a teenager. That isn't going to change soon.

DigitalSea• 13 years ago

I still think this is a bad acquisition. I mean don't get me wrong, Tumblr has potential to be something great but at present it feels like a more modernised version of Geocities complete lots of animated GIF's, memes and soft pornography. It's definitely not worth $1.1B (but what do I know?).

They have the traffic, but it won't be easy to monetise. It might be good for Yahoo! to tackle a large challenge and let Meyer truly show them she has the moxie to turn the fledging company around.

Considering Yahoo! have a nice cache of PHP based websites, it makes sense the purchase of Tumblr is as much as a talent hire as it is an acquisition of a high-trafficked website with potential. Will be keeping an eye on this, if and when Yahoo! buy Tumblr. The deal isn't even concrete yet, but it's still highly likely given Tumblr has months left to choose a buyer and finalise a deal.

jasonlingx• 13 years ago

Will they let the porn stay?

The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

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