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Yahoo Pinkie-Swears It Won't Ruin Tumblr
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."
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.
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.
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.
-- "So they told me that using the download page to download something was not something they anticipated." - Bill Gates
the VC's just got their 10x payday. what happens after that is irrelevant to them.
this is related to the story how?
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.
i could live a little longer in this prison
Flickr is probably Yahoo!'s second most useful feature, after its Fantasy Football leagues.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
There is significant chunk of pron on Tumblr - ahem, I mean, so I've heard - and now it's owned by a publicly traded company? They will definitely be the first casualty (followed by about 75% of Tumblr's employees in 13 months or so).