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.
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.
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.
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
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.
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.
"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.
They tried this before with Flickr. And the result was that they let Flickr stagnate while the rest of the world changed dramatically. And now instead of being at the head of the pack, as Flickr once was, it's an also ran.
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.
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.
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..
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.
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?
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.
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.
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.
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.
Accessing Tumblr sites directly is for "legacy support". A very high percentage of Tumblr impressions are through the Dashboard where all style/themes are removed from the content.
So I've heard. It's perverse. All the styling and theming is atrocious, but good news: on this blogging platform, nobody actually looks at the public facing pages! Everything looks great (if you think completely unstyled text and images and no externally-hosted content == "great") so long as you log in to a view only you can see.
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.
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.
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.
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.
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.
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.
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.
Another survey, this one from December and including all Americans (not just teens), showed people spend more time on Tumblr than Twitter, Pinterest and LinkedIn combined:
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.
Photo sharing is said to be core to what Facebook users value.
I see Instagram as a defensive acquisition -- they don't want to lose market share to a competitor. It took Instagram only two years to reach 100 million users.
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.
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.
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.