Yahoo looking to acquire Tumblr?

On the other hand, Tumblr has been bad about monetizing its product in a way that benefits both its users and itself. (David Karp is on the record as saying that he doesn't want to impose a revenue model on users—something he says would hurt creativity—most recently at GigaOm's paidContent Live conference.) I could see Yahoo taking over Tumblr and being more flexible on this front, which could be a good thing for Tumblr creators, many of which have been forced to troll for traffic on other networks despite the fact that their base is on the Tumblr dashboard.

Having attended that conference, it didn't seem clear to me that Karp had a lot of answers as to how to improve the monetization situation for both the company and end users (they've been pushing a blanket ad model that isn't targeted but is focused on exposure-style marketing), so it could be good on that front.

But on the other hand, this community already has a lot of frustrations with the way Tumblr is operated, and a purchase like this could scare much of that audience away.

I'm sure an exit at this point makes sense for the company. But the whole thing sort of bugs me.

It's less clear why it would be a good idea for Tumblr, other than being a really great exit for their investors and early staff -- but at the right price, that could be enough, which is probably why the number we're hearing is so large.

The biggest risk for both parties is Yahoo somehow killing Tumblr by starving it of resources (like they did with Flickr, and arguably with Delicious). I think Marissa Mayer is smart enough to learn from that mistake -- she has been pouring resources into Flickr, although it's probably too late to save it.

(Disclosure: I am a former Yahoo)

Finding out that a company's management thinks "cool" is something you can buy strikes me as an excellent signal for shareholders that it's time to sell.

Geocities was the tumblr of its day.

Buying a shiny popular thing without reasonable and specific plans, getting bored with it, and then shutting it down or just letting it languish is not a good use of capital.

Was Mayer known for being good at capital allocation/m&a at Google? I've got the feeling this isn't going to end well.

Tumblr while a great asset is going to be FAR to expensive to pay off for Yahoo at this point, and a lot of the junior assets they have purchased have no or little direction.

In my opinion Yahoo is on a quick slide towards 'AOL territory' where they have to slim down to their 'core' to make any money and will likely suffer innovation starvation until they are almost totally irrelevant.

Add to that the relief of financial exist for most of the stakeholders, how can you possibly keep motivated people around? This is almost reckless spending for Yahoo! shareholders.

wtf?

I could totally see this being a convincing proposition if I were the founder of a startup that Yahoo approaches to acquire.

With this, I think the rumored $1B acquisition price is worth it. Without a good (or any) business model, I'm worried that Tumblr will eventually die out. This offer by Yahoo is a win win situation for both. I really hope that Yahoo will not destroy the Tumblr feel and environment.

I'm really excited about this. Any what will it turn out to be. And if in any case Yahoo eventually destroys or break Tumblr, I think there will be a new opening in the micro blogging space for young people to use.

....ha. I'd call the enthusiasm "enveloping" some startups these days to be pretty irrational.

― Mark Twain

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