I’m really only mildly interested in the news Yahoo is buying Tumblr, although I like the purchase price of $1.1b because it means my flickering hope of striking rich is still alive, just have to find the right idea.
What has interested me is the coverage in the media. Because depending on which commentary you read it’s either a genius move, or a damned stupid one. Yahoo kind of set the trend by promising not to stuff up:
“Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business”
And off we go…
“paying $1.1 billion for a company with $13 million in revenue seems a little nuts to me”.
Tumblr generated about $13 million of revenue last year. It also, presumably, lost money. Some pundits glance at these numbers and conclude that obviously the Tumblr deal is just yet another hallucination by idiot managers who don’t understand that they’re paying good money for nothing…..These criticisms are silly.
Tumblr faces a fundamental problem that starkly differentiates it from Facebook and Twitter. It will probably never grow as larger as either rival, having long catered to an audience of artists and creative types that limit its base to hundreds of millions of people, not billions.
To both make money off of Tumblr while not infecting it with the company’s anodyne reputation will be a huge challenge. Here’s hoping Yahoo actually doesn’t screw it up.
One has to applaud Marrisa Mayer’s “go big or go home” move and the notion that Yahoo’s board is standing behind this purchase will (reportedly) full support. A successful integration of Tumblr into Yahoo’s forward-looking strategy could end a losing streak of purchases and fizzled launches which includes Maven Networks and Geocities as well as Livestand and Yahoo 360.
“the more I look at this tie-up, the more it makes sense to me”
Tumblr’s users are almost universally unhappy with the news that the site might get sold to Yahoo. And they may let their fingers do the talking, and the walking.
I give up. I have no idea whether this is a good idea or a bad idea.