Observations On Yahoo’s Purchase Of Tumblr

By Erica Gregory

Was This A Wise Acquisition By Yahoo

Well of course Yahoo’s CEO, Marissa Mayer, thinks so.  She told CNBC viewers that all of the methodologies used supported the valuation for the deal.  Tumbler has some impressive traffic with 105 million blogs and 900 million posts per second according to CEO, David Karp.  WordPress founder, Matt Mullenweg, said on his blog ” I think we’re at the cusp of understanding the ultimate value of web publishing platforms, particularly ones that work cross-domain, and while Yahoo’s all-cash deal by some metrics, like revenue, is very generous, I think it’s a tenth of the value that will be created in these platforms over the coming years.”  WordPress, another highly used blogging platform, differs from Tumblr in that Tumblr is more of a micro blog focused on non-textual content. However, a main difference and probably one of the primary interests for Yahoo is the social network and community that Tumblr has created.

This acquisition may not just be about gaining a web publishing platform but also about gaining young and fresh talent.  One of Yahoo’s past acquisitions, Flickr, is thought to be losing a lot of its users to Pinterest due to the lack of social sharing capabilities when compared.  According to Mayer, Tumbler “will still operate independently” but there will be some behind the scenes integration such as search or pulling content from Tumblr as well as collaboration and idea exchange.  So, if Yahoo is going to use this merge to help bring innovation to the team  as well keep the integrity of Tumblr then this could very well be a wise decision but only the future will tell.

How Will This Effect Users And Business

Mayer says “it’s clear that Tumblr has a really good thing” and “we don’t want to want to mess that up”.  So hopefully Tumblr users will not feel much of an impact. However, it is hard to imagine that users will not see some difference as Yahoo attempts to increase monetization. I would expect to see more things like promoted/sponsored posts, and ad integration within video content almost immediately.

Businesses should be interested in the increased valuation of content and the ability to share that content; particularly if you are trying to reach a younger demographic or if your business is built around creative content such as design or photography.  If you are already using Tumblr then hopefully this merger will bring some attention, added advertising/marketing value, and thus a larger audience for your content.

There is bound to be some change resulting from this deal, but as long as it is centered around users and content that should be good for business. Furthermore, this deal enforces the truth that content is king and yours has value!