Yahoo Board Approves a $1.1B Pricetag For Tumblr

TechCrunch reports that Yahoo's string of acquisitions may soon include Tumblr: "The Wall Street Journal is now reporting via Twitter that the rumored $1.1 billion cash acquisition deal for social blogging site Tumblr has been approved by Yahoo’s board of directors. The Tumblr acquisition was rumored last week, with a price tag reportedly north of $1 billion, which appears to be accurate if the WSJ’s sources are correct." The article notes, too, that "Yahoo had only $1.2 billion cash on hand as of its most recent quarterly earnings, which makes an all-cash offer for Tumblr a lot more of a stretch than it would be for someone like Apple, or even Facebook, which acquired Instagram for $1 billion in a mix of both cash and stock."

Comments

Strange

[XPeter]

They could've bought YouPorn for a lot less.

Re:Strange

[popo]

Not strange at all. Marissa Mayer isn't capable of doing much besides making overpriced acquisitions and hires.

Here's (yet another) social blogging platform with no clear revenue model.

Re:Strange

[SimonTheSoundMan]

I see the strategy. This and a service like Summly mixed together. Intelligent shared content on a huge scale. That could actually be something pretty awesome. Really make Twitter totally obsolete.

Re:Strange

[fustakrakich]

I don't think you know what you're talking about

Re:Strange

[gweihir]

Current stock prices are not a predictor for the future. Well understood by anybody that cared to find out.

Re:Strange

[gweihir]

Indeed. At Google that did not matter, as they have heaps of money to throw after one bad project and acquisition after another and still be very profitable. At Yahoo, this will just kill the company, even if it may take a while.

Re:Strange

[Jherek Carnelian]

+1

I remember laughing my ass off a while back when one of the CEOs in the long line of CEOs at HP said that the stock market is an objective measure of a company's performance. That was a little bit before the dotcom crash IIRC.

Re:Strange

[Anonymous Coward]

I make 5-figures a month 'monetizing' porn. That's part-time work (4-8 hours/week on average).

Re:Strange

[Lueseiseki]

Source: Yahoo Finance

Oh my god IT'S ALL A BIG CONSPIRACY!

Re:Strange

[meta-monkey]

I am fascinated by your ideas, and would like to subscribe to your newsletter.

Re:Strange

[nospam007]

"I make 5-figures a month 'monetizing' porn. "

Jacking off on camera again, Steve?

Re:Strange

[Anonymous Coward]

I make 5-figures a month 'monetizing' porn. That's part-time work (4-8 hours/week on average).

You are not a publicly traded company with stockholders who will run away from a company that is serving up porn. Many funds, pensions and private investors are not as accepting or opened minded about porn as most /.ers

Re:Strange

[Colonel Korn]

Yahoo is also sitting in a nice pile of cash 4 bil i think.

RTFS. Yahoo has $1.2B on hand and are commiting 92% of that on this purchase.

Re:Strange

[Zontar The Mindless]

Am I the only one who's reminded of the end times at Sun by this?

Re:Strange

[gweihir]

Indeed. I think I read that also and it was one of the moments that reinforced my belief that most CEOs do not have a clue how their business works.

Re:Strange

[Stormwatch]

And #2 is... AOL, seriously?

Re:Strange

[Anonymous Coward]

I make 5-figures a month 'monetizing' porn. That's part-time work (4-8 hours/week on average).

I had not idea cam girls pulled in that kind of cash.

Re:Strange

[David Gerard]

"We've received your test reports. Your drug intake is well below industry standards. Here's some techno CDs, remedy this immediately."

Re:Strange

[BuypolarBear]

Source: Yahoo! Finance

Nothing suspicious to see here folks.

Re:Strange

[gweihir]

I was thinking the same thing ;-)

Re:Strange

[Jafafa Hots]

The only problem with that scenario is that it was Yahoo that bought it.

Which means Tumblr will go the way of Flickr. It will be milked and ignored until it's about as dated as black and white TV.

Re:Strange

[hairyfeet]

You know, I have heard that argument several times and i just don't think it holds up to logic, its the same one that MSFT apologists use when explaining away why all their failed acquistitions don't matter but just because they have a LOT of money does not mean they have INFINITE money, and one can only throw around a billion here and a billion there before as they say in Washington it becomes "real money".

Can Google, Apple, and MSFT piss more money away with zero ROI? Sure they can. does that mean it isn't gonna hurt them over time? That would depend on how much positive cash flow they can keep coming in and whether or not spending that money on stupid shit costs them an opportunity down the road that could have actually worked.

Re:Strange

[gweihir]

As long as they have one primary cash-cow, they can do arbitrarily bad management of the rest. And they do. For MS it is Office and Windows, but these seem to be getting more and more shaky, hence the desperate attempt to get onto phones and tablets by giving the desktop OS the same GUI. Still, even with that MS can waste a lot of money. They have gotten more careful though, at least that is my impression. Apples is a different case, they were close to death and know it. They _are_ very careful. But Google is not. Look at all the projects they scrap. Look at all the acquisitions nobody has ever heard from again. They have ads, search, Gmail and maybe maps to fuel that statistics for the Ads and that is it. Everything else Google has does not produce revenue. Still, they are doing really well cash-flow wise. Not that anybody really smart wants to work for them today, but they get enough of the not quite so smart ones.

Re:Strange

[jbolden]

The cash cows for Microsoft are their server products SQL Server, Dynamics, Sharepoint, Lync...

Re:Strange

[fustakrakich]

Maybe not, but a year long trend is somewhat noteworthy, and I'm sure some people, including the pretty little Ms Mayer, are pleased with the performance of Yahoo. Now, unless the role of CEO is entirely ceremonial, to call her 'incapable' seems out of touch, don't you think? She is making money for her associates, and nothing else matters.

Re:Strange

[Seumas]

Marissa's long hair isn't in a ponytail.

Re:Strange

[rtb61]

I really hope you don't think management should take credit for a price rise following a price drop and a failed buyout and no perceived future, no, surely you wouldn't do that. Neither would you take credit for any revenue increases that were simply inflationary or even worse bought in. That would be really really be blonde dumb. Better POE ratios and improvements in the value of assets but please not "I'VE GOT PUPPIES, LOTS AND LOTS OF PUPPIES". You might impress the non-investor but those with a bit more nous are going to look on you as the fool. That puppies thing, nobody said much at the time because it was just so, so, ???!!! seriously that was a business plan, puppies.

Re:Strange

[TrollstonButterbeans]

You know, I have heard that argument several times and i just don't think it holds up to logic, its the same one that MSFT apologists use when explaining away why all their failed acquistitions don't matter but just because they have a LOT of money does not mean they have INFINITE money, and one can only throw around a billion here and a billion there before as they say in Washington it becomes "real money".

Can Google, Apple, and MSFT piss more money away with zero ROI? Sure they can. does that mean it isn't gonna hurt them over time? That would depend on how much positive cash flow they can keep coming in and whether or not spending that money on stupid shit costs them an opportunity down the road that could have actually worked.

What is the point of being rich if you can't blow money at will? That is the definition of being rich and the point of being rich.

Re:Strange

[jythie]

The know what makes their short term investors happy and their stock options valuable....

While we like to mock CEOs, at the end of the day they got to where they are by being good at what they do. The problem is what WE think they should be doing and what actually pays off is pretty out of sync. Right now the job market for CEOs rewards short term profits at the expense of long term viability. Investment in the future is generally punished. Granted the public and the tech community might point out that such behavior hurts the company, the people who actually influence the person's pay and future employment options do not, nor do they care. Long term stability and profits just are not considered priorities.

Re:Strange

[gtall]

I think what you are after is the opportunity cost. Chasing an acquisition means integrating that acquisition into your current environment which generally means a culture clash. The people from the acquisition are the leadership and the rank and file. The leadership, if they have any sense at all, will be looking for the exits as soon as the deal closes because the chances they will be replaced are high if only because the powerbases in the new company will want them gone. The rank and file will probably be anxious and they too will be looking for the exits since they didn't grow into the acquirers way of doing things and figure they too will be on the chopping block as soon as the acquiring company can see fit to do without them. The steady attrition will mean the institutional memory will go bye-bye. After that is only left the technology. But if the technology was so good, they wouldn't have wanted to be acquired in the first place, which points to another problem: the deal is probably a lemon because a vibrant, growing company should not be wanting to see itself sold...unless the insiders know something isn't working correctly.

Also, if it isn't a good fit, you will waste years figuring that out when you should have spent those years on a better investment....such as in-house research to serve your core markets, etc.

Re:Strange

[hairyfeet]

I think its pretty obvious why they want to sell, they lost 12 million bucks last year and there really is no way to monetize the users without them all just leaving. That is the whole problem with all this "social" aimed crap in a nutshell, any attempts to monetize them will result in a shittier experience and the users walking away.

But yeah opportunity cost is a good way of looking at it, if these companies buy one too many stupid companies when that smart company that might actually be a good fit comes along they may either be short of capital or the board will be seriously reluctant to spend the money in light of previous failures. I mean if a perfect fit for HP came along that cost say 4 billion how likely do you think the board will be to bite when they've had to write off over 10 billion from previous deals? And this one is insanely stupid, spending 92% of their cash on a single company that hasn't even turned a profit yet?

if I didn't know better I'd be wondering if this CEO is a plant designed to lower the value thus making it easier to buy Yahoo out, but sadly more likely just another incompetent rich CEO that will make a ton of money no matter how stupidly or badly they do their job. The rich get richer is one of the few constants in the universe it seems.

Re:Strange

[evilRhino]

While we like to mock CEOs, at the end of the day they got to where they are by being good at what they do...

This is a false premise. It is just as likely that they have gotten where they are by social acumen, and have no idea what they are doing.

Re:Strange

[TWX]

This is Yahoo, not Earthlink!

Re:Strange

[lipanitech]

I agree they bought flickr that did like little to nothing for them just recently they bought news summary app Summly and now tumblr not sure what there going for lately but I hope they have some kind of plan.

Re:Strange

[evilRhino]

This may be true, but my argument isn't that there may be minority of competent (some did build the company themselves, for example). My argument is the premise that *all* or even *most* of them got to where they are by being good is demonstrably false.

That's a shame.

[lxs]

I kind of liked Tumblr. Not that I ever felt the need to sign up for an account.

Re:That's a shame.

[Seumas]

I never understood the appeal of it and I don't see the billion dollar value of it. There are already a thousand other popular blogging platforms - Blogger probably being the most prominent . . . except Blogger seems to be more useful since you can actually leave comments on someone's update (I've never intentionally gone to a Tumblr page, but when I wind up there, they never seem to allow any comments and are just a stream of other idiots linking to it for about five hundred lines at the bottom of the page).

Making this...

[Anonymous Coward]

The first Yahoo owned content online I will have actually visited since 1998

Re:Making this...

[dingen]

You never look at pictures on Flickr then?

Re:Making this...

[Seumas]

Who wants to look at someone else's stupid photos?

And if you're looking for photos, in general, for some purpose -- you usually just use Google Image Search . . .

Re:Making this...

[jampola]

"Who wants to look at someone else's stupid photos?"

Yep. That's why we have Instagram!

Re:Making this...

[Seumas]

For the same purpose as facebook -- not to look at other peoples stuff, put to vomit our own into a stream that we believe followers are on the edge of their seats for.

Also, instagram is exactly as stupid, "original", and overpriced as Tumblr.

Let's see

[Intrepid imaginaut]

From wiki: Tumblr made $13 million in revenue in 2012 and hopes to make $100 million in 2013. So far, Tumblr has taken $125 million in funding from its backers. Tumblr reportedly spent $25 million to fund operations last year.

So it's making a loss of $12 million a year and yahoo is willing to fork over $1.1 billion on the hope that it might actually make $100 million this year?

Interesting!

Re: Let's see

[alen]

With these numbers it's worth $10 billion

You have to value it in eye balls

Re: Let's see

[Intrepid imaginaut]

As soon as I can buy my dinner with a sack of eyeballs that's just what I'll do.

Re:Let's see

[gweihir]

No, stupid. The decision of a CEO desperate to find something that works. Betting on the wrong horse is a time-honored tradition with inexperienced CEOs. Some get lucky, but not this time.

Re:Let's see

[alexander_686]

So, to reorder your numbers a bit,

100m in projected revenue / 40m in cost of goods this year = 60m in profits. (40m is from wiki's original source, numbers are projected, so....)
1.1b market cap / 60m profit = Price/Earnings ratio of 18.
  P/E ratio for the S&P is 14.

It looks like it has high growth, that would push the numbers up. Huge risk / numbers are projections / I am doing the numbers on the fly without all of the accoutning number - would push the numbers down.

Re:Let's see

[Intrepid imaginaut]

numbers are projected

Indeed they are.

Re:Let's see

[meta-monkey]

Traditional stock valuation methods kind of assume your company isn't a fad that could implode in a heartbeat. There's nothing to think Tumblr has survivability better than say, MySpace. Yes, I can see paying a billion for something that generates 100 million a year...if there's a good reason to think that asset will last more than 10 years. Free-to-use websites that generate 100 million a year for more than a decade are unicorns.

Re:Let's see

[alexander_686]

Well, yeah.

Today's value of a stock (bond, or any finical asset) is based on all future cash flows discounted (i.e. interest rate / time value) . So the real question is: How confident are you in your projected cash flows? Sold or is just a piece of blue sky? (See security rules on “Blue Sky” companies.)

Re:Let's see

[Intrepid imaginaut]

Well, yeah.

Today's value of a stock (bond, or any finical asset) is based on all future cash flows discounted (i.e. interest rate / time value).

No it really, really isn't.

Re: Let's see

[wmbetts]

You could if you were a cromag, but then you'd probably just eat them for dinner.

Re:Let's see

[Colonel Korn]

So, to reorder your numbers a bit,

100m in projected revenue / 40m in cost of goods this year = 60m in profits. (40m is from wiki's original source, numbers are projected, so....)
1.1b market cap / 60m profit = Price/Earnings ratio of 18.

  P/E ratio for the S&P is 14.

It looks like it has high growth, that would push the numbers up. Huge risk / numbers are projections / I am doing the numbers on the fly without all of the accoutning number - would push the numbers down.

Ah yes, we should always base P/E ratios on the "hoped for" earnings over the next year, especially when they're about an order of magnitude higher than the real world numbers from right now.

Re:Let's see

[Seumas]

Because cupcakes.

Re:Let's see

[hairyfeet]

Bingo! Give that man a ceegar! The problem with spending any real money on these things is that the users have zero brand loyalty and can just disappear like a fart in the breeze, we have seen this time and time again, from MySpace to Flickr, you try overloading the place with ads to try to get your money back and the users bail and you are left with a ghosttown...how much did Yahoo pay for Flickr or Geocities?

The sad part is this CEO is not only doing something insanely stupid, they don't even seem to realize WHY Yahoo has had that sudden growth all of a sudden, as somebody in the trenches I can tell you why....MSFT backlash. Trying to force all their users into a "MSFT Ecosystem" by killing Live Messenger and Hotmail for Skype and Outlook ran a LOT of the users off and since they don't like the "everything is chat" style of Google, guess where they went?

Yahoo is betting the farm on people actually liking the brand when in reality they just hate the other guy THAT much, but the loyalty just isn't there which they are gonna find out the hard way when they try to get a ROI on this, not to mention as others have pointed out your pension funds and the like aren't gonna want to invest in a porn company and that pretty much is what Tumblr is used for, porn clips.

Re:Let's see

[Jason Levine]

And even if we assume the best case scenario: Tumblr becomes "super profitable" and makes $100 million every year, it'll take 11 years just to pay off the $1.1 billion that Yahoo spent on it. 11 years is forever in the tech industry. Why, 11 years ago Yahoo! was a viable search engine just barely behind Google in market share!

What a scam

[arcite]

Must be nice to run a multi-billion dollar corporation that makes barely any profit and spend money like a drunken sailor.

Re:What a scam

[fustakrakich]

Yeah, yell, any drunken sailor that almost double the value of my investment in one year (you have to click on the button) is alright with me

Re:What a scam

[Grieviant]

Yeah, yell, any drunken sailor that almost double the value of my investment in one year (you have to click on the button) is alright with me

The question is why. What has Yahoo actually done in the last year to justify a near doubling of their share price? Have they put out a new product that everyone loves which is making them gobs of money? Unless you consider canceling work-from-home and paying out a shitload of money for a half-assed content summarizing app stroke of genius ...

Re:What a scam

[fustakrakich]

Who cares why? It's a game of roulette.

Re:What a scam

[IANAAC]

Who cares why? It's a game of roulette.

The reason our economy is fucked, distilled in one sentence.

Re:What a scam

[hairyfeet]

They aren't MSFT? Seriously that is it, I can tell you that I have had to set up countless yahoo accounts for my customers in the last 6 months as the switch from Live Messenger and Hotmail to Skype and Outlook (which most of their users I talked to frankly thought was inferior) ran off a LOT of customers.

Now one would argue that if that was the case why didn't they go to Google but the answer is simple, the way Google treats everything like a chat turns off a lot of the users, and with MSFT shitting all over its customer base trying to be Apple that left only Yahoo. So the fact that Yahoo suddenly got a big bounce really doesn't surprise me, you had a LOT of people that were using Hotmail and Messenger that bailed when MSFT started to force the switch and really Yahoo was the only alternative that was in any way similar to what they had.

Re:Man, Marissa loves spending money

[drinkypoo]

There is a sexist joke in here somewhere. She has been on a spending binge for acquisitions...

It was perfectly innocent on that front until you suggested it might be otherwise. There's no shortage of men who love to throw money around. Were you going to mention shoes or something?

"Social" is a lose

[Animats]

Despite all the noise, almost nobody is making money in "social". Even Facebook isn't very profitable, despite its size. The business strategy in "social" seems to be to give the service away for a few years, build a following, then crank up the density of ads until the users get fed up. Worked for Myspace, right?

Facebook traffic peaked about a year ago. Twitter is now exploring the user's threshold of pain with "sponsored tweets". This is robocalling in another form.

Basic truth: ads with search results are useful to users and effective for advertisers, because they're presented when the user is actively looking for something relevant. Ads on "social" are merely annoying because the user is looking at what their friends are doing.

Re:"Social" is a lose

[meta-monkey]

Also, you need replacements to sustain the user base. For a site that started for college-aged users, the demographics of facebook are aging. Teens/students don't want to be on FaceBook because their parents (and grandparents) are on FaceBook.

Re: "Social" is a lose

[FuzzNugget]

You forgot "get acquired for an absurd amount of money by a corporation with billions to throw around and a dunce CEO, spend the rest of your life sucking down fruity drinks on a beach".

Re:"Social" is a lose

[Anonymous Coward]

I think it's a huge mistake for Facebook to have a policy of no children allowed under the age of 13 (even with COPPA forms). It really needs to become part of children's lives *before* they start wanting to hide things from mom and dad. That's EXACTLY how they're going to lose out on the next generation.

Re:"Social" is a lose

[Seumas]

I still don't understand how Tumblr is "social". The few times I've (unintentionally) landed on someone's pages on Tumblr, I see absolutely no interaction going on. I don't even fucking know if Tumblr has the capacity/features for interaction (it just always looks like streams of updates or photos with no comments or other input whatsoever). I thought Tumblr was a poor-man's blogging service without any features and am absolutely baffled to find out that it either makes a dime or is worth a billion dollars. I am not, however, baffled at the stupidity of people or committees.

Re:"Social" is a lose

[Seumas]

I honestly thought Tumblr was a throwaway junksite run out of a basement until all the hipster tech dorks started yammering about it in the last three months.

Who cares about tumblr?

[gweihir]

Guess that is the beginning of a series of fatal decisions that will seal Yahoo's fate. None of those making these bad decisions will suffer for it though.

Re:Who cares about tumblr?

[BonThomme]

the beginning?

Re:Who cares about tumblr?

[gweihir]

The key word being "fatal", as in "starting the end-game". You are quite right though that there were a lot of bad decisions before, and it looks likely that the worst decision was actually not tumblr, when I think about it, but hiring the new CEO. So, yes, I stand corrected.

Something stinks here

[randomErr]

A company that has $13 million in revenue in 2012 and hopes to only make $100 million in 2013 is purchased for 1.1 billion? This smells of a multi-level pump and dump scheme.

I will bet what will happen in the next 18 months is: Yahoo buy's out Tumblr. Tumblr's CEO sells all his stock Monday morning and get insanely rich. The new tYahoo company goes bankrupt by the end of the year. Microsoft or Bill Gates himself will swoop in and FINALLY by buy Yahoo making the current CEO insanely rich. If gates himself buys it sells Yahoo back to MS and adds to his insane fortune. Microsoft and integrates all of tYahoo's tech into MS and starts a second round of war against Google search and Google products.

Re:Something stinks here

[Xest]

Something stinks about all of Yahoo's acquisitions so far.

I've pointed out previously what a sham the summly acquisition ones. Long story short, summly was largely a shell of a company that outsourced development to 3rd parties for everything but the iOS user interface - the AI, the Android version etc. were all outsourced. The company CEO were a few silicon valley vets bought in by the kids' Dad who was an investment banker and his mum who was a Yahoo lawyer. The investment banker father got people like Steven Fry, Ashton Kutcher, and the Murdoch's to invest in the company and publicise it prior to the take over by Yahoo. Yahoo doesn't plan to use the Summly product, they're actually ditching it.

So given that the question is if Yahoo just want the summarisation tech behind Summly (which doesn't work very well by the way) then why didn't they save themselves about $39million and go straight to the AI company Summly used?

The whole acquisition stunk of money games, of some kind of pump and dump scheme too. The famous names invested in it were pumping it, and then it was dumped on Yahoo for a valuation that was over 40x what the company was actually making in profit.

I'm not really sure what's going on at Yahoo but there's something very fishy about it all, people do seem to be getting rich off a constant stream of overpriced acquisitions. It's as if it is indeed actually just being stripped of cash.

Re:So what?

[gweihir]

Indeed. I have never, ever dealt with anybody to technologically incompetent as Yahoo. I had to remove a domain subscription from them as after talking to 14 different customer "service" reps, I still had not found anybody that understood the basics of the DNS system. Yes, I wanted to use my own servers, and while nobody else had a problem with that, Yahoo did not even understand the question.

Ya-who?

[tutufan]

Yes, but on the plus side, they now have a brand that people think of as still being in business...

D:

[pseudofrog]

my feels! i can't

This seems like complete insanity...

[fuzzyfuzzyfungus]

Hey, Yahoo, remember that other photo-sharing site you already fucking own?

Please, do, tell me what 1.1 billion dollars worth of tumblr brings to the table that a mild reskin(to put the pictures with captions in columns, rather than in 'galleries') of flickr could have ready to demo inside a week and roll out in short order?

Re:This seems like complete insanity...

[sehryan]

Tumblr isn't a photo sharing site, it is a micro blogging platform. Flickr has photos and I think video (upload). Tumblr has photos, video, audio, and finally text, which further breaks down in to posts, quotes, and links.

So please, tell me how a five day sprint to reskin Flickr is going to add all of those additional features.

Re:This seems like complete insanity...

[Colonel Korn]

Tumblr isn't a photo sharing site, it is a micro blogging platform. Flickr has photos and I think video (upload). Tumblr has photos, video, audio, and finally text, which further breaks down in to posts, quotes, and links.

So please, tell me how a five day sprint to reskin Flickr is going to add all of those additional features.

No, Tumblr is a crappy niche site used almost exclusively for photo sharing and operating at a significant loss.

Re:This seems like complete insanity...

[ColdWetDog]

Look, you guys don't get it, do you? You never get this sort of thing.

Of course Flikr and Tumblr will mix well. They both end in a contracted 'r'.

It's pretty clear why you all aren't in business.

Re:This seems like complete insanity...

[jbolden]

Depending on how you count somewhere between 200m - 1/2 billion users who rarely if ever use Yahoo. Also David Karp as a Yahoo executive for 4 years.

Re:This seems like complete insanity...

[jbolden]

She knows it came up in the board meeting. They are cool with it. Yahoo has decided to be porn friendly.

Re:So what?

[meta-monkey]

You're not wrong, but I had to laugh at the idea of "ruining" GeoCities. That sort of implies that at one time GeoCities was not ruinous, and then became so.

Dangerous Games

[Whatchamacallit]

Tumblr is worth exactly squat if Yahoo screws with it too much. A social platform is only as good as it's users. If the users abandon the platform in protest to Yahoo's new direction it will spell the doom of Yahoo! Instagram's transition was initially painful and they lost a good deal of users. Yahoo has to be very careful, best to keep things the same for a long time and then slowly introduce improvements that will excite and encourage the customer base and not annoy them. A major misstep and it can all come crashing down very quickly... Social media is a high stakes game. To pay that much for Tumblr is an extreme gamble.

Don't write code!

[Anonymous Coward]

Yahoo is trying to buy the pieces they need to create an integrated end-to-end platform that combines Google and Facebook. They don't want to develop a code base, because they're too late to the game. Google and Facebook have been doing it for a decade or more. Yahoo can't afford to catch up. They're buying all the pieces they need, and ... well, they'll integrate it. That's going to be the hard part. Anyhow, Yahoo is paying a premium to gobble up all the pieces they need to be more mobile-device oriented than Facebook, more social than Google, and bring Bing to the masses in a way Win8 won't.

If this works, I'll be shocked. This is going to die a horrible, flaming death in the stage when they try to integrate all this code together. That is not going to be easy.

By then, I'm sure Mayer will have given herself plenty of bonuses and will be out the door - someone else can clean up the mess. That's how business works these days. Mayer seems to be channeling her inner Carly Fiorina!

Re:Don't write code!

[DuckDodgers]

No, Yahoo is trying to buy sexy brands. All the technology in the world won't get you attention if you don't have a recognizable brand. Bing works pretty well, maybe as well as Google Search, but since so many people hate Microsoft they just can't dethrone Google for search. Facebook could have built their own Instagram in a month, Mark Zuckerberg didn't buy it for the technology, he wanted to own the Instagram name.

Yahoo's biggest problem is that everyone considers it old news. Mayer is trying to fix that by getting some recognizable brands into Yahoo.

Great! Now they can ignore it for 8 years!

[Y-Crate]

Just like Flickr!

Do none of you fight for the users?

[Scorch_Mechanic]

No, I'm not talking about the irritating tween idiots. I'm talking about the artists. For every groupthink mob of self-entitled screaming idiots shouting their misinformed opinions at the top of their tiny little lungs, there's an artist taking advantage of the dead simple microblogging platform.

Tumblr is the home of the Drawblog (contains art), the Ask (ask a character questions, receive drawn responses) blog, and the art compilation blog. To my knowledge, none of these things substantially exist outside of tumblr. Sure, I could follow an "art appreciation" group on facebook, but because facebook doesn't deliver stuff to me in anything resembling chronological order it's largely useless to me.

I am worried. Legitimately worried that Yahoo is gonna screw up Tumblr.

Re:Do none of you fight for the users?

[dingen]

So they'll just move to Wordpress or Blogger or use some other random blogging platform. What's the problem?

Re:Do none of you fight for the users?

[Seumas]

Bothering to make your own website seems to sadly be a lost art and something even a twelve year old child was capable of doing. Now, if it isn't a click away and shoved in our face, we can't be bothered to do it.

Ideally, Yahoo! buys Tumblr. Fucks it up. Tumblr goes away. Maybe they can do the same with eHow and the other festering crap of the internet that plagues Google's search results.

Re:Do none of you fight for the users?

[thoth]

Nobody fights for the users because they are the product, as they are utilizing Tumblr's services for free and are thus not customers.

Besides, this is a private corporation in corporate America, which is by definition infinitely wise in how they allocate their hard earned resources because they are guided by the never-erring invisible hand. If this somehow turns out to be a huge mistake (gasp!), they will be suitable punished by the market, whereby punished means senior executive make their payday anyway while the stock price is pummeled and the shareholders take the loss.

Re:Do none of you fight for the users?

[Mex]

No offense, but are you 16, or perhaps never explored the internet? There's hundreds of alternatives to blogging platforms, including rolling your own. I think even Google Plus works like you'd want with super advanced "Chronological order" features.

I imagine Yahoo will indeed screw up Tumblr, but "Think of the artists!" is the last reason to get worried about...

Bubble

[manu0601]

1 billion for buying a user community that does not pay anything, and is served 13 millions in advertising? Um, Internet bubble is coming back.

Re:So what?

[hairyfeet]

Actually you may laugh at me but geocities actually served a function which Yahoo promptly shat all over and ruined. What Geocities was in reality was the first "fan driven" web, from fanfics to fanpages it was a magnet so people that liked a particular subject could get together and discuss that subject and you'd be surprised how well it worked for that. Hell there was several times that Whedon and Mutant Enemy would go to these to not only get fan reactions but to see where the fans thought things should go and the same was true of the writers of Star Trek and several other sci-fi and horror of the time, it gave the fan community and the writers an easy way to interact and for that it worked quite well.

So yes I would say losing Geocities was a "loss" because despite all the jokes it gave people a centralized place where they could discuss their favorite works, learn of other works in a similar vein, and to discuss where they thought the works should be heading.

Re: So what?

[Anonymous Coward]

so basically geocities was what tumblr is today.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Another bizarre and destructive buyout

[intermodal]

Yahoo! seems to have a business model that somehow thrives on buying sites, driving away all the users, and then shutting down the service. If this goes through, Tumblr will die like countless other sites bought by Y!

Not to mention Tumblr thriving specifically on photos that people don't actually own. Y! lawyers will destroy it if the executives don't.

Will this work

[Voyager529]

Just like MusicMatch?
Just like Konfabulator?
Just like Geocities?
Just like Dialpad?

I'm not holding out much hope for Yahoo's ability to successfully leverage an acquisition.

Re:I cannot wrap my head around it

[Jason Levine]

I couldn't help but think that Tumblr could be recreated with a free copy of WordPress MultiSite and some plugin/theme work. If Yahoo took that path, the investment would have been a LOT less than $1.1 billion. Of course, they wouldn't have gotten the "eyeballs" already on Tumblr but, like you said, those Tumblr users might not stay Tumblr users and definitely can't be counted on suddenly becoming Yahoo users. Buying a currently hot (in terms of user usage but not in terms of profitability) company in the hopes that this will make your long-declining company hot never works. It just results in the "hot" company cooling down quickly. Kind of like how pouring one cup of boiling water on an iceberg cools the boiling water more than it melts the iceberg.

Re: So what?

[hairyfeet]

Not unless tumblr lets you create communities around particular subjects. I haven't used the thing but from what I was told it was more like Twitter than Geocities. With Geocities say you liked "Buffy TVS" you could then go to a Buffy site and it would have links on the left to all the other affiliated Buffy sites and then that would be broken down to various actors,spinoffs, future and past story arcs, you could land on a single page and from there find out pretty much everything there was to know about a subject with no more than 3 clicks.