It is always reassuring when a CEO in a merger/acquisition of a business says, “[we’re] not going to screw it up” when discussing changing the platform. Many of us are jaded by statements like this from past experiences, where one larger company buys a smaller one for some innovative system or awesome product only to find that they alter everything that made the smaller organization great. With that background: Yahoo has purchased Tumblr. for 1.1 billion dollars. In a tweet about the platform, Marissa Mayer stated:
“900 posts [are made] a second on Tumblr. [This] means 2.3 Million new posts [were made] during our 42-minute investor call this morning :)”
The decision was made during an executive meeting held on Sunday, May 19th and announced on Monday. What this conveys is that 1) the acquisition is focused on generating revenue and 2) targeting a powerful facet of the digital community. The internet has transitioned into a different community than the traditional one many baby boomers and middle aged individuals would define as ‘community.’ Advertising, content and media are consumed and generated at breakneck speeds now; with such constant growth, businesses are still trying to understand how to monetize some of the features of the internet, such as streaming blogs like Tumblr.
I categorized this story under marketing because this move, aside from giving Yahoo access to a target (and profitable) demographic, is largely based on marketing. Namely, the ability of Tumblr to reach the 18-25 audience and deliver targeted ad content. This isn’t a technological or developmental move by Marissa Mayer, CEO of Yahoo, it is a revenue generation one. According to Marketing Land’s report on this acquisition, Tumblr introduced minimal native ad units in early 2013 to the mobile version of the site. David Karp, the founder of Tumblr, has always focused on keeping ads and intrusive marketing to a minimum on the platform and has made statements to keep within that aspiration.
Without knowing how to integrate a revenue generating stream into Tumblr, Yahoo is going the ‘traditional’ route of incorporating ads. This may included banners, text and sponsored links, but ads are coming to Tumblr. As Mayer put it, “we want the ads to be as great as the content.”
I think this is exactly what they needed as well, fresh avenues for revenue and innovation, but a newer method of ad delivery would be nice. Yahoo sat back idly watching the ‘giants’ playing and waited for an opportunity to jump in the game, but waited too long and got close to AOL status. As for native ads, John Battlelle states it best when he says, “The reason native works is because the advertising is treated as a unit of content on the platform where it lives.” It’s about having ad content that is relevant to the content it competes with and hopefully works with.
I believe that, as oppose to investing to develop new services and systems which would lead to fighting an uphill battle, Yahoo is looking to integrate where it makes the most sense. Investing in a successful platform is a good step (especially to keep other companies from picking them up). What matters now is how they use all the new tools and strategies. As well as whether they work as intended.
Some evidence of this is the integrated personalization features Yahoo Newsfeeds which already incorporate using Twitter and associated profiles. In the feed, content consumers are able to directly interact with associated profiles by sharing the news story or following the author/publisher of the article. Will they integrate Tumblr in a similar fashion? Most likely, but we all hope to avoid a Yahoo integration into Tumblr. If the services and system Yahoo offered was worthwhile and desirable, users would be using them; it won’t help their ‘not screw it up’ statement to integrate a failing service like chat into the Tumblr platform. Personalization is one thing, but forced integration is another.
That’s not bad… but this is:
The long and short of it is, Yahoo will do with Tumblr whatever it pleases (or whatever was in the acquisition agreement). We as users have little to no say in much of what happens next. All we can do is sit back and see what becomes of yet another social avenue for self expression. Will we be faced with cumbersome ads and promotions or will we see Yahoo leverage the beloved platform in a way that provides the third-string search company with much needed public value without taking away from the streaming blog’s appeal. I think Marissa is too smart and savvy to ‘mess this up’ and I have great expectations for both Yahoo! and Tumblr. But only time will tell and we could all be fools. This could be the dying gasp of a company grasping for a straw.
The official Yahoo! Blog moves to Tumblr with a press release about the acquisition: