This makes it pretty simple to judge Marissa Mayer's performance at least in the next year. If Tumblr shows any sign of failure, its pretty much equivalent of Marissa Mayer failing at Yahoo. If tumblr shows signs of progress not seen Pre-acquisition, it's a sign of an ex-Googler making a smart acquisition AND making it succeed in the long run.
Google is the best company when it comes to making large acquisitions work out for the parent company. Just see Analytics, YouTube etc.
Yahoo is probably one of the worst if you see how many of their 100M+ acquisitions have resulted in complete failure.
I disagree. We don't know what Yahoo wants to do with Tumblr. All we have are rumors, a WSJ report and tons of idle speculation. Without knowing what the intended end game is, I don't see how we can call the acquisition a "success" or "failure", much less the CEO's. I also don't agree that "a sign of progress" is "making it succeed in the long run".
Google is no genius with large acquisitions either. Motorola and Blogger come to mind immediately, but there are others too.
I think we can all agree that Yahoo has been mismanaged at least until recently. I just don't think a CEO's performance is a boolean value that depends on an undefined "any sign of failure" on a large acquisition with a 1 year time frame.
A business without a proper model, lack of revenue, losing money, fighting off pornography and spammers is worth 1.1 billion in cash to Yahoo. The users will flee, they always do. The engineering dept. will be hired out, it always is. All that Yahoo will have is a domain, a database filled with cats and naked people, and a real problem on its hands. Bad move, Yahoo. The way to re-build Yahoo is not to buy zombie businesses. It is to give the engineering dept. freedom to innovate.
As always? is this the rule? Given precedents of instagram etc, it doesn't seem like an improbable price.
However, how is tumblr fighting porn? I thought they actively encouraged it. It's a big part of tumblr for sure (and big part of the value yahoo pays for).
Can someone explain to me why you spend $1.1B on this if the company was running out of cash, had investors skittish about funding a new round and there were no competing bids.
Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less.
What am I missing in this? I hope the answer is not that doing that would create enmity between Yahoo and Tumblr's investors or something like that? That would strike me as a gross violation of their fiduciary duty to their shareholders, no?
This is great news for the NYC startup ecosystem, which had been lacking in the billion dollar exits that create the next generation of entrepreneur-investors.
How many of Tumblr's employees have been with the company more than a year or two? It sounds like they were only 20 employees at the end of 2010 [1] so I'm curious how many people actually got significant enough vesting to get the cash to call themselves entrepreneur-investors.
The Double Click acquisition spawned a ton of investment and led to companies like Gilt and 10gen. It will be interesting to see what Marco Arment does with a cool $100 million or so. He seems to have a golden touch. Tumblr, Instapaper, and The Magazine makes him 3 for 3.
How does it feel to work at a company when it pays over a billion dollars to 20-somethings working on the opposite coast?
It's not mentally reconcilable. The only way not to go crazy is if you don't think about it at all, but that's just denying the reality of you being exploited while getting few of the benefits.
Some people say, "Well, I have 'job security!'" Is "job security," the greatest corporate-serving propaganda of our generation, really worth $800,000 per year in surrendered earnings?
If you believe that price should be determined by supply and demand based on perceived value, like it mostly is in these cases, then there's no exploitation.
If you believe that price should be attributed based on Labor expended, then the Yahoo! workers are already extremely disproportionately paid relative to the average worker, so it makes no sense for them to feel exploited.
It's amazing how many people here are saying things like "my tumblr represents my identity and I do not want to lose my identity to Yahoo" and "I don't want to lose the only place where I can express myself."
I wonder how this will pan out for Tumblr with Marissa Meyer at the helm. If we look at Flick (bought by yahoo in 2005), it hasn't seen much innovation or new features in the last 8 years and has been mostly coasting. I wonder if this will be the case for Tumblr under Marissa's leadership.
Flickr had a major interface refresh a couple of years ago, and I'm also pretty sure Flickr has lots and lots of paying customers. So, it may have already "panned out," in a "don't mess with success" sense, depending on what that means in the context of Tumblr.
As a long term Flickr user, I can only say I totally love it. It is simply perfect for what it is and I happily pay for my pro subscription every year, and I would hate to see it change into something else because someone else thought they knew better than me what I needed.
Yahoo may be better maintainers than innovators, but I'd rather have seen posterous acquired by Yahoo and maintained than acquired by Twitter and killed.
I share your reservations, but has Tumblr really been going anywhere the last couple of years? It's a little like Flickr in how it's calcified in development, but is still a solid product, nevertheless, albeit one that feels a bit stale.
For the existing team at tumblr (say anyone who has stock that is) things like this end up being a buzz kill after it settles in. Working towards something is fun and motivating. Once you get it things simply change (speaking from personal experience and observation here (also as you are pointing out).
For example, would you like to get paid now for all the work you are going to do for the next 10 years in advance and still find it as fun and challenging? If you were an athlete would you want to know in advance that you were going to win 2 medals in each of the next olympics? To me that takes the fun out of things. I think it's obvious why things are different after money changes hands.
In this situation how do you show up for work at twitter and still be creative after essentially the "game", if you want to call it that, is won? You will probably itch to get over to a new challenge. Not to be cliche but the journey is a big part of the picture.
And wasn't one of Marissa's plans when she came aboard to try and revive Flickr, since she saw it as a big asset? Not that it's jumped leaps and bounds since then, but I would think that she'd want to nurture tumblr a bit.
We're starting to see another destructive trend in acquisitions. First we saw a trend in acquihires. This clearly is bad for users and only serves founders interests. Now we're starting to see a trend towards acquiring relevance. For example, Facebook bought Instagram for "$1 billion" before it made any money for the sake of remaining relevant. In Facebook's defense, they bought it on a cash/stock (reportedly 30% cash/ 70% stock) deal. The stock ended up being worth much less. Yahoo buying Tumblr may work out, but it's very unlikely it will have any direct financial return on investment. The only return on investment is the slight chance Tumblr stays a relevant brand and in return keeps Yahoo's brand afloat. Yahoo needs to make some big bets, but I'm not convinced this is the right one.
What do you think would be their best bet? My guess is it would be something less trendy since most of those end up being fads. Google's best acquisition was clearly Applied Semantics; not YouTube.
I still think this is a bad acquisition. I mean don't get me wrong, Tumblr has potential to be something great but at present it feels like a more modernised version of Geocities complete lots of animated GIF's, memes and soft pornography. It's definitely not worth $1.1B (but what do I know?).
They have the traffic, but it won't be easy to monetise. It might be good for Yahoo! to tackle a large challenge and let Meyer truly show them she has the moxie to turn the fledging company around.
Considering Yahoo! have a nice cache of PHP based websites, it makes sense the purchase of Tumblr is as much as a talent hire as it is an acquisition of a high-trafficked website with potential. Will be keeping an eye on this, if and when Yahoo! buy Tumblr. The deal isn't even concrete yet, but it's still highly likely given Tumblr has months left to choose a buyer and finalise a deal.
Yahoo hasn't done much justice to their past buyouts. I feel like this going to be a waste.
Yahoo isn't doing much for their existing products. They should really focus on what they have. No doubt the apps and all have been updated but desktop UI still remains same. No consistency in UI across different products.
The new ymail still isn't that great.
Another thing is why can't yahoo come out with own such product - they do have some brilliant engineers.
I am thinking that the problem with yahoo is that most likely Mayer doesn't have much faith in the present crop of developers/managers. Recently she did a lot of acqu-hires, because traditionally really good developers are less likely to join Yahoo over better choices.
Maybe improving existing products and making new impressive products are in the plans for Mayer, but to get there she needs capable people and she needs to make Yahoo seems like a good/profitable/fun place to work at.
For a long term sinking ship like Yahoo I think major changes in direction will need some time.
This is the time to start the next Tumblr, as the last Tumblr is now dead.
For the same reason that Flickr was replaced by Instagram (and missed the entire mobile wave), Tumblr will lose traction over the next couple of years and be replaced. They'll stick around, but their traffic will fall by half in 24 to 36 months. Flickr for example has been losing traffic for two straight years.
Nothing less cool than using a Yahoo blogging site if you're a teenager. That isn't going to change soon.
From a recent-grad perspective, Yahoo fell far, far behind the rest of Big Tech on the desired employment scale. Part of this was for changeable reasons -- we've read in recent months about the larger offers and better perks that Mayer's been implementing -- but another huge reason is that Yahoo's workplace has a reputation for uninspiring people doing uninspiring work.
From all the anecdotes I've heard about Yahoo's workforce (and yes, I realize they are merely anecdotes) -- the subpar engineers should be worried, but the great engineers should be excited.
It's mixed. Some are jealous of what some of these startups, like Summly, are getting paid. Others are happy to have more talented people to bolster our ranks.
I'm definitely in the latter. I've watched Yahoo lose so many great people, especially last year. This is a good thing for Yahoo.
As an outsider it looks like Yahoo is saying it will back big crazy engineering projects if they have potential. To me Yahoo went from being the last place I'd ever want to end up to being an exciting company. It's an amazing turnaround.
How is this becoming public information so quickly? Is this being leaked? It seems like it's not beneficial for this to become public knowledge for anyone except Tumblr if they are trying to start a bidding war.
I suspect a big part of the reason that Yahoo! makes these acquisitions if for PR, i.e., "look! we're a dynamic company making huge moves!"
Look at Summly---how much value did they reap simply from the media coverage? They killed the software immediately, and I'm sure Yahoo! Research could've whipped up a pretty decent summarization engine at no extra cost.
Does anyone know how they get traction the very first time ? It's interesting how they got this far while the initial reception seems cold [1]. What kind of marketing they do ? what's the vertical ? answer from quora[2] doesnt satisfy me.
The original headline from WSJ was “Yahoo to Buy Tumblr for $1.1 Billion” which is obviously questionable since they state in the same article that Tumblr has not actually confirmed the deal.
There is room for more full-service Internet ecosystems. Microsoft has under-invested in their ecosystem. Or maybe they can't decide if they want a full-service consumer-oriented ecosystem.
No overseas-based ecosystems are strong enough to enter the US market. Yahoo is strong in some markets in Asia. If they can buy a couple more top brands and shine-up Flikr, Yahoo Finance, and some others, they will be in good shape.
[+] [-] zaidf|13 years ago|reply
Google is the best company when it comes to making large acquisitions work out for the parent company. Just see Analytics, YouTube etc.
Yahoo is probably one of the worst if you see how many of their 100M+ acquisitions have resulted in complete failure.
[+] [-] gnok|13 years ago|reply
Google is no genius with large acquisitions either. Motorola and Blogger come to mind immediately, but there are others too.
I think we can all agree that Yahoo has been mismanaged at least until recently. I just don't think a CEO's performance is a boolean value that depends on an undefined "any sign of failure" on a large acquisition with a 1 year time frame.
[+] [-] jonpeda|13 years ago|reply
[deleted]
[+] [-] orangethirty|13 years ago|reply
[+] [-] return0|13 years ago|reply
However, how is tumblr fighting porn? I thought they actively encouraged it. It's a big part of tumblr for sure (and big part of the value yahoo pays for).
[+] [-] tnuc|13 years ago|reply
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] imjk|13 years ago|reply
[+] [-] bambax|13 years ago|reply
[+] [-] minimaxir|13 years ago|reply
http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...
[+] [-] pkmehta|13 years ago|reply
Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less.
What am I missing in this? I hope the answer is not that doing that would create enmity between Yahoo and Tumblr's investors or something like that? That would strike me as a gross violation of their fiduciary duty to their shareholders, no?
[+] [-] sethbannon|13 years ago|reply
[+] [-] dmor|13 years ago|reply
[1] http://techcrunch.com/2010/11/19/tumblr-funding-office-hires...
[+] [-] jcampbell1|13 years ago|reply
[+] [-] seiji|13 years ago|reply
It's not mentally reconcilable. The only way not to go crazy is if you don't think about it at all, but that's just denying the reality of you being exploited while getting few of the benefits.
Some people say, "Well, I have 'job security!'" Is "job security," the greatest corporate-serving propaganda of our generation, really worth $800,000 per year in surrendered earnings?
[+] [-] icebraining|13 years ago|reply
If you believe that price should be determined by supply and demand based on perceived value, like it mostly is in these cases, then there's no exploitation.
If you believe that price should be attributed based on Labor expended, then the Yahoo! workers are already extremely disproportionately paid relative to the average worker, so it makes no sense for them to feel exploited.
How exactly are the Yahoo! workers exploited?
[+] [-] minimaxir|13 years ago|reply
(Not providing a link due to high probability of NSFW content. Search for #yahoo! on Tumblr.)
[+] [-] ricardobeat|13 years ago|reply
Also
[+] [-] jalev|13 years ago|reply
[+] [-] ben1040|13 years ago|reply
[+] [-] lucisferre|13 years ago|reply
[+] [-] kawsper|13 years ago|reply
[+] [-] jamescun|13 years ago|reply
[+] [-] rhizome|13 years ago|reply
[+] [-] copper-horse|13 years ago|reply
Yahoo may be better maintainers than innovators, but I'd rather have seen posterous acquired by Yahoo and maintained than acquired by Twitter and killed.
[+] [-] kmfrk|13 years ago|reply
[+] [-] larrys|13 years ago|reply
For the existing team at tumblr (say anyone who has stock that is) things like this end up being a buzz kill after it settles in. Working towards something is fun and motivating. Once you get it things simply change (speaking from personal experience and observation here (also as you are pointing out).
For example, would you like to get paid now for all the work you are going to do for the next 10 years in advance and still find it as fun and challenging? If you were an athlete would you want to know in advance that you were going to win 2 medals in each of the next olympics? To me that takes the fun out of things. I think it's obvious why things are different after money changes hands.
In this situation how do you show up for work at twitter and still be creative after essentially the "game", if you want to call it that, is won? You will probably itch to get over to a new challenge. Not to be cliche but the journey is a big part of the picture.
[+] [-] dave5104|13 years ago|reply
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] jalev|13 years ago|reply
[+] [-] benackles|13 years ago|reply
What do you think would be their best bet? My guess is it would be something less trendy since most of those end up being fads. Google's best acquisition was clearly Applied Semantics; not YouTube.
[+] [-] inmygarage|13 years ago|reply
[+] [-] DigitalSea|13 years ago|reply
They have the traffic, but it won't be easy to monetise. It might be good for Yahoo! to tackle a large challenge and let Meyer truly show them she has the moxie to turn the fledging company around.
Considering Yahoo! have a nice cache of PHP based websites, it makes sense the purchase of Tumblr is as much as a talent hire as it is an acquisition of a high-trafficked website with potential. Will be keeping an eye on this, if and when Yahoo! buy Tumblr. The deal isn't even concrete yet, but it's still highly likely given Tumblr has months left to choose a buyer and finalise a deal.
[+] [-] lizzard|13 years ago|reply
[+] [-] mani27|13 years ago|reply
[+] [-] pavs|13 years ago|reply
Maybe improving existing products and making new impressive products are in the plans for Mayer, but to get there she needs capable people and she needs to make Yahoo seems like a good/profitable/fun place to work at.
For a long term sinking ship like Yahoo I think major changes in direction will need some time.
[+] [-] adventured|13 years ago|reply
For the same reason that Flickr was replaced by Instagram (and missed the entire mobile wave), Tumblr will lose traction over the next couple of years and be replaced. They'll stick around, but their traffic will fall by half in 24 to 36 months. Flickr for example has been losing traffic for two straight years.
Nothing less cool than using a Yahoo blogging site if you're a teenager. That isn't going to change soon.
[+] [-] mani27|13 years ago|reply
[+] [-] jmduke|13 years ago|reply
From a recent-grad perspective, Yahoo fell far, far behind the rest of Big Tech on the desired employment scale. Part of this was for changeable reasons -- we've read in recent months about the larger offers and better perks that Mayer's been implementing -- but another huge reason is that Yahoo's workplace has a reputation for uninspiring people doing uninspiring work.
From all the anecdotes I've heard about Yahoo's workforce (and yes, I realize they are merely anecdotes) -- the subpar engineers should be worried, but the great engineers should be excited.
[+] [-] Yahoo9823471|13 years ago|reply
I'm definitely in the latter. I've watched Yahoo lose so many great people, especially last year. This is a good thing for Yahoo.
[+] [-] k_kelly|13 years ago|reply
[+] [-] _ak|13 years ago|reply
[+] [-] sudonim|13 years ago|reply
[+] [-] itsprofitbaron|13 years ago|reply
[+] [-] jcdavis|13 years ago|reply
[+] [-] brown9-2|13 years ago|reply
This is a done deal now, it's not the start of Tumblr's bidding process.
[+] [-] fatjokes|13 years ago|reply
Look at Summly---how much value did they reap simply from the media coverage? They killed the software immediately, and I'm sure Yahoo! Research could've whipped up a pretty decent summarization engine at no extra cost.
[+] [-] uthgard|13 years ago|reply
1. https://www.hnsearch.com/search#request/submissions&q=tu...
2. http://www.quora.com/Tumblr/How-did-Tumblr-get-traction
[+] [-] dmor|13 years ago|reply
Now other outlets are reporting it as a done deal when it isn't. http://www.daniellemorrill.com/2013/05/in-race-to-be-first-o...
[+] [-] Zigurd|13 years ago|reply
There is room for more full-service Internet ecosystems. Microsoft has under-invested in their ecosystem. Or maybe they can't decide if they want a full-service consumer-oriented ecosystem.
No overseas-based ecosystems are strong enough to enter the US market. Yahoo is strong in some markets in Asia. If they can buy a couple more top brands and shine-up Flikr, Yahoo Finance, and some others, they will be in good shape.