It’s
easy to argue that Yahoo-Tumblr deal will be another chapter of Internet
misguided Merger and Acquisition If you want to make the pro case for the deal; consider a
parallel universe where Yahoo is Facebook and Tumblr is a much more mature
company than Instagram. Tumblr and Instagram, both have inspiring voyage. The vital difference between the two scenarios; for Yahoo it’s
a do-or-die situation. In April 2012, Facebook
paid cash and stock initially valued at about $1 billion to acquire revenue-free
Instagram, a popular fancy photo-sharing app. Google famously paid $1. 65
billion in October 2006 for YouTube, the online-video Hercules. The Facebook/Instagram arrangement
is merely a year old, which means it’s
still pretty early to assess it. But so far it seems to have worked perfectly.
Tumblr hatched in 2007, tossed by Internet guru David Karp and lead
designer Marco Arment. Tumblr is hit by
approximately 13 million people a month, most of them with their own active
blogs. If Facebook is the social network for
online identification and profile, and Twitter is for communication, Tumblr serves
a different role: self-expression. Tumblr is a buffet having all different
social networking sites together can’t. Its blogging platform (like
Wordpress, Blogger or Posterous) with social networking service makes it the illustrious,
allowing individuals to create their own virtual identity. Within the starting two
weeks, 75,000 people had jumped on to Tumblr to enjoy a site that's not much
different than it is today. As of today,
Tumblr hosts more than 108 million "tumblelogs".
If,
the Google solution for Yahoo, Marissa Mayer can score the Tumblr deal, she’ll
be looking for a boost. Yahoo's $1. 1bn deal to buy Tumblr is one of the craziest decision of
chief executive Marissa Meyer’s life (leaving Google, though was an exception).
Integrating and empowering Tumblr with Yahoo’s gigantic capability in display
advertising, providing a more diverse platform to social networking addicted users
can potentially increase Yahoo’s profit manifold. Yahoo
is lately not likely considered mainstream in the tech community because it
lacks the wow factor and developer prestige of Facebook and Google.
The
contest for Yahoo will be to extract a more meaningful, balancing and
sophisticated advertisement platform, keeping Tumblr’s identity and loyal users
intact. The best part of the deal is the timing; Tumblr has been experimenting
native ads akin to promoted tweets for the past year, offering its advertising
proposition some legs. When In late 2011, when
Tumblr last raised $85 million venture-capital investment, the company was
valued $800 million.
