8 ms·

Tumblr’s stumbles under Yahoo

118 points by ikeboy 10y ago

davidu 10y ago
I love Tumblr, but this article is a bit distorted from reality. Tumblr was failing to execute on the revenue side of their business, both before their acquisition, and then after. At some point, Tumblr had to try and become a business and not just a website. This article points blame at Marissa, but shouldn't it really be pointing at David, or a team of leaders?
- Infinitesimus 10y ago
  I agree with the sentiment that the article reads as if "This is Yahoo's fault" - not to say they didn't play a role as the parent company. Bottom line here is that Tumblr (with or without Yahoo) failed to monetize their platform. This line stuck out to me as very true reflection of what the Valley sometimes looks like: > Tumblr’s stumbles under Yahoo may go down as a cautionary tale, both for the perils of a large corporation buying a hot startup and for Silicon Valley’s belief that any social network reaching hundreds of millions of people will inevitably generate boatloads of cash one day. There was talk of "We'll make it an advertising platform" but did anyone really ask the Tumblr team "How" ? (I'd love to hear info from any insiders on HN) Makes me wonder how many times a day the execs at Facebook wonder how they can ever monetize expensive companies like Whatsapp.
  - rm_-rf_slash 10y ago
    I suspect purchases such as whatsapp to Facebook were less about opening up new revenue streams, and more about locking in potential competitors. Not everybody uses their Facebook account but they may be more prolific on Instagram. They might not like being constantly monitored by Facebook Messenger but even with WhatsApp's end-to-end encryption, Facebook is still provided with valuable metadata, and the more diverse data sources, the more metadata resembles regular, easily interpretable data. It's like Microsoft buying LinkedIn: the market was clearly bearish on the company, but a tech Titan like Microsoft has a lot to gain by keeping its finger on the pulse of potential hires around the world - with a crucial head-start before headhunters can find star performers.
  - elliottcarlson 10y ago
    The advertising platform was in development prior to the acquisition, and in my humble opinion, the plan that was in place was not bad at all, and certainly had users best interests in mind as well. I moved off of the ads team when initial integration started with Yahoo, so I don't have as much insight in to this.
- mathattack 10y ago
  The buck stops at the CEO. If you pay a billion dollars for something, you can't say "They failed to execute before I bought them." Post-purchase execution falls under the CEO too. You can fire the manager, but you can't escape the blame if you're the boss. If you hire a roofing company to fix your roof, and one of the workers screws up, it's still the responsibility of the owner who hired them.
- ukyrgf 10y ago
  The article pretty clearly says they were failing to monetize because Karp didn't want intrusive ads, so he was happy to get bought out and have that become their problem rather than his.
ivraatiems 10y ago
This article wholly ignores the rampant technical problems with Tumblr and the way that every "fix" for them makes the platform worse. Whether it's removing the ability to post reply chains, the completely broken Web and mobile interfaces, the haphazard rollout of new features, the sudden and unhelpful modifications to the search function's behavior, or the continuous useless pushes for people who are just reading blogs to instead make a Tumblr of their own, the site is far, far off track from where it should be development-wise. Yeah, ads are annoying, and I can't imagine Yahoo has helped matters, but I think the feelings of Tumblr's user base on how it's being modified are a large contributing factor in its decline. Another factor is the failure of Tumblr's staff to appreciate the diversity of ways Tumblr can be used: as a picture blog, as a server status log, as a way of communicating person to person, as a way of communicating person to corporation, as a way of creating funny writing projects or online roleplaying, or just as a content aggregator. All of these are valuable uses of the platform. Not all of them are ever accepted or catered to, in fact, most of them are ignored. I'd like to see more on why Tumblr's dev team does what it does than on why its ads team sucks.
- Grue3 10y ago
  This comment is just plain false. Pretty much every feature has been objectively improved since Yahoo acquisition. - search is actually usable now, was completely useless before acquisition - new messaging features are better than stuff they had before - rich text editor better than the one they had before (except if you want to edit in HTML or Markdown in which case it completely sucks now, but very few people probably post in HTML or Markdown) - replies, I have hardly ever seen them used before they were removed. in any case, the new implementation is much better - should I even mention the freaking video player? Of course the users will complain, but I mean this is Tumblr, the userbase will complain about everything.
  - ivraatiems 10y ago
    You didn't address most of the items I listed, but I will note for fairness' sake that as I said, I'm a former user. I left in November or so. I've heard good things about messaging, but not anything else you mention. Replies were HEAVILY used by my part of the Tumblr community, and the changes to them really screwed things up for us. Like I said, lots of use cases for the site. I certainly don't feel on the whole that tumblr was better when I stopped using it than it was when I started. Even if that is true now, it wasn't true for a long time, so my argument remains the same: its decline is due to inadequate tech work for a long period of time.
fideloper 10y ago
Gosh the writing is so biased I couldn't finish the article. Stating something as fact (oh, a source disputed this), artful use of connotation ("a yahoo source played it off..."), and lastly (where I stopped reading), calling the founder of Tumblr s "20-something". You don't get to call a 29 year old a "20-something". Feels overly sensationalized, even if yahoo is where start ups go to die.
- fideloper 10y ago
  Huh, sure downvotes. Y'all should be cognizant that there's a human being with their own priorities writing articles liked this. My point in showing how biased this article is so you can remember to take it with a huge grain of sale. Probably less story here than it makes it out to be:
- galistoca 10y ago
  What would you call him then? 30-something?
  - fideloper 10y ago
    29 (which lacks the "too young" connotation the author has placed there)
  - dopamean 10y ago
    He's pre-30.
    - selimthegrim 10y ago
      I feel like pre-30 valuation is the new company metric in SV.
  - seanp2k2 10y ago
    Twenty nine and three quarters :) I don't think there's any need to add an adjective to it unless the intention is to convey ~"too young; naive; inexperienced" as seems the case here. They could simply say e.g. "John Doe, 29, [...]".
gnicholas 10y ago
Their ad strategy sure did suck. I know this because I really wanted to advertise on Tumblr since many of their users were already posting about my startup and driving tons of traffic (tens of thousands of page views, from posts with 100k+ notes) to my website. I contacted their ad team and was told the minimum ad buy was $25k. I explained the situation and said that given the popularity of our product among the Tumblr community, I had no doubt we could find a revenue-positive way to advertise on Tumblr, but that we couldn't commit to $25k sight-unseen. I never heard back from them. Considering how easy it is to advertise on Google or FB with just a couple bucks, I was shocked that Tumblr is so inflexible. I guess it's not surprising they couldn't get to $100M in ad revenue, since they'll only talk to companies that can afford $25k experiments.
- shostack 10y ago
  Not diminishing your situation, but respectfully, you likely weren't the target customer-base for their ad sales team at that stage of the game. Sounds like your budget was too low, and you're a direct response advertiser (from the "revenue-positive" comment). That $25k min. spend is a sales qualifier and looks like it was successful in filtering you out in favor of advertisers who don't bat an eye at testing something new for $25k sight-unseen. With big media properties that are being cleaned up, a lot of that early focus is typically on big brands who are doing large branding efforts that have cool and sexy creative and are super customized to the platform. They want to reach lots of people, and the property in turn wants to leverage it as a large case study to attract other brand advertisers. What you were looking for would not help meet their objectives because your budget was likely too small, and because they are a new display-driven property, they don't want advertisers focused on performance. Why? Well, most performance advertisers are not super savvy with how they look at display performance, and would be looking at it from a last click measurement standpoint where it would almost certainly bomb (like most display, social, etc.). Big brands doing branding plays are looking for reach and engagement (or post-impression performance metrics in some cases). This is better for Tumblr for purposes of building case studies and selling in to other big brands, because big brands tend to not care as much about overpriced CPMs, which means more margin for Tumblr. Again, down the line it might have made sense that you could make a lot of money for your brand and might have been a good fit, but realistically, you just weren't their target. Same reason FB weeded out all the crappy affiliate ads to the best of their ability and started pushing big brands for engagement-based stuff.
daniellermm 10y ago
I said it on the day of the acquisition and I'll say it again: Tumblr is the geocities of 2014. Tumblr wasn't even a good company before the acquisition.
- jacquesm 10y ago
  That means we can expect a shut-down any moment now, given that that's what Yahoo! did to the original Geocities.
  - iamdave 10y ago
    Right in the nostalgias, dude. I had totally forgotten about those days...somewhat hoping we don't get a repeat.
  - reality_czech 10y ago
    We should get to work right away building an archive. Gotta do it now, before the shutdown hits! We can call it "Bumblr," and it will memorialize all the worthwhile commentary that was ever made on Tumblr. (This should be a megabyte or two of text that we can upload to mega.com.) On the other hand, the Tumblr archive for porn will be called "Fumblr" and it will be hosted in Brazil.
- galistoca 10y ago
  If you're talking about profits, youtube wasn't a good company before the acquisition, and it still isn't. But it is an important company.
  - seanp2k2 10y ago
    Geocities was important too, but I'd argue that it's important socially and not businessly. Users love Tumblr, but there's probably no way to convert that into profits. Same thing with Twitter IMO. Everyone hates promoted tweets, but many love Twitter. In particular, it's great for political dissent and organizing protests. Good luck monetizing that. In the case of SnapChat, tons of their most active and loyal users are in elementary / middle / high school. I was in a restaurant a few days ago an saw 4 children whose shoulders came just above the table sitting there for an hour snapchatting each other, and suddenly the massive user base of it made sense. Again here, good luck extracting money from children inside an app that they very likely try to hide from their parents. In the case of FB Messenger / WhatsApp / Telegram / Line / Kik / Viber / Kakao: this stuff is commodity chat, and the value lies in other people in your network using it. If it's found that any one of them are doing something that users don't like (like showing ads or reading your messages or mining who you're talking to), the users will have no problem finding alternatives. It's like trying to monetize Skype, without the value proposition of being able to call land lines. It's like saying that AOL Instant Messenger was worth $1bn. The value is in the utility of the thing, which crucially, is trivially replaced by a competitor. At least Facebook has the benefit of not requiring returns on messaging and instead pitching it as an integration with their core platform, which is great at getting ads in front of eyeballs. Again here, users love these utilities, but I don't ultimately think that they're economically viable businesses.
relaxatorium 10y ago
I wonder how much the two switches in ad teams correlate to the weird period of time when the ads on Tumblr were about 100% for a weird choose your own adventure cartoon thing?
jwebb99 10y ago
> Some knew the name, but they were hoping to be bought by a trendier tech company... It didn't occur to me that millennials could be oblivious to the existence of Yahoo. (Afterall, millions of people still use Yahoo Mail, Flickr, etc.) > Karp, a coder at heart, is described by colleagues as “openly hostile” to traditional advertising. I suspect Tumblr users, much like Reddiors, are allergic to advertisements. > Traditional marketers... were also skittish about some of the raunchier user-generated content on Tumblr. No shit. In many respects, Tumblr is essentially a bootleg porn site. From Day One, people have cited Tumblr's reliance on "adult content" as a major problem for Yahoo. I thought the would just ban adult content, but then I realized that they can't because they would lose a significant chunk of their userbase.
rgbrenner 10y ago
Yahoo derailed Tumblr? Ok, sure. Just remember where it was when Yahoo acquired it.. $13m in revenue and $25m in expenses for 2012 (net loss of $12m for the year). With $125m raised, and $114m of debt on the books. Yahoo acquired them just a few months after they announced these results for 2012. It's easy to blame Yahoo for Tumblr's problems.. but Tumblr wasn't Twitter or Instagram. It was a tiny business (in comparison).. that without Yahoo very well could have been out of business by now. http://www.businessinsider.com/heres-tumblrs-total-revenue-for-2012-and-how-it-will-make-a-profit-in-2013-2013-1 http://www.businessinsider.com/heres-tumblrs-total-revenue-f...
- niftich 10y ago
  Context is important. Tumblr had a lot of porn blogs, sure, but most people on it were 15-25-year-olds running personal blogs, interest blogs, and building communities. It was essentially the new Livejournal, but with Twitter-style reblogs. Yahoo knew this, and wanted this demographic for their ad ecosystem. They often thought of themselves as a 'media company', and they liked the creative aspects of the community. They also, wisely, knew that Tumblr users would never accept being forced into using a Yahoo account, so they had to keep the userbases separate. But this meant they couldn't use Tumblr to build Yahoo's social presence and its brand. They'd harvest some analytics, display some very loosely targeted ads to people highly averse to ads, but that mercantilist relationship was all was to be. In that light, they clearly overspent.
- harryf 10y ago
  But now it's 2016 and services like Tumblr have all gone mobile but Yahoo is killing the Tumblr app by requiring a login as I've explained before here - https://news.ycombinator.com/item?id=11071841 https://news.ycombinator.com/item?id=11071841
dandare 10y ago
Is it just me or is the article desperately trying to find examples of how Yahoo hurt Tumblr only to come up with several trivial gaffes? I once worked in a company damaged by acquisition and it looked nothing like this. Tumblr simply didn't become the exceptional miracle some hoped for - and that is it.
- moridinamael 10y ago
  Indeed, it seemed like the author was trying to obfuscate that Tumblr had a childish company culture and a barely-innovative and questionably valuable product.
lkrubner 10y ago
Mergers are hard, and "big company buys small company and derails it" is a common story, in every industry. Some historians of the automobile industry (Paul Ingrassia) suggest that Oldsmobile would have gone much further if it had remained an independent company. Wikipedia points out it was the #1 car company, shortly before it was bought: "In 1901, the company produced 425 cars, making it the first high-volume gasoline-powered automobile manufacturer. (Electric car manufacturers such as Columbia Electric and steam powered car manufacturers such as Locomobile had higher volumes a few years earlier). Oldsmobile became the top selling car company in the United States for a few years around 1903-4... General Motors purchased the company in 1908." https://en.wikipedia.org/wiki/Oldsmobile https://en.wikipedia.org/wiki/Oldsmobile John F. Love points out that in mid 1960s Burger King was building twice as many restaurants as McDonalds, and was on track to surpass McDonalds by the end of the 60s. At that time, Burger King had very smart management. However, Burger King was then bought by Hormel, who regarded it as simply a place to dump surplus beef that couldn't be sold through other channels. And that is why McDonalds is the #1 burger company. The software industry is full of such stories. Roomkey.com (it's pre-purchase name was Hotelicopter) might have transformed the hotel industry, but it was bought by a joint venture of Choice Hotels, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International, and Wyndham Worldwide. This joint venture regards Roomkey merely as a bargaining chip to get better rates from Expedia ("Give us better rates or we will invest more in Roomkey".) I could try to list all the innovative startups that Cisco has bought, cannibalized, and then discarded, but it would take me all day. Mergers are the main way that innovation is destroyed in our society. Over and over again small startups are bought, and then killed by the different needs of the new owners.
- Doctor_Fegg 10y ago
  Just for the record (because it's interesting), it was Pillsbury who bought Burger King, not Hormel. Same applies, though.
- seanp2k2 10y ago
  I don't want to be a negative nancy here, but does anyone have any examples, preferably in the past 10 years, where a company with cool tech was acquired and did even better because of the acquisition? A company which really thrived and wouldn't have without being acquired? Things like Nest make me cynical that the vast majority of acquisitions end up destroying all the value created before the acquisition by the acquiree. Edit: Android might be an example acquisition success story.
tn13 10y ago
Always loved Tumblr as a porn site and I am not kidding. I found Tumblr's porn blog far excellent in quality than was ad infested, pop-up opening porn websites.
douglance 10y ago
Tumblr deserves it. The format encourages one-up-manship that leads toward every escalating victimization and identity crises in its users.
dang 10y ago
Several users have complained about this article being overly biased, so we've replaced the one bit of it we can (its title on HN) with a slightly more neutral phrase from the text.
hugh4life 10y ago
My issue with tumblr is that the search interface for it is awful and google/bing miss a lot of posts.
iomike 10y ago
It's not shocking. They did the same with Flickr and a bunch of the blogger-backed startups in the mid-00s

118 points by ikeboy 10y ago

I love Tumblr, but this article is a bit distorted from reality. Tumblr was failing to execute on the revenue side of their business, both before their acquisition, and then after. At some point, Tumblr had to try and become a business and not just a website. This article points blame at Marissa, but shouldn't it really be pointing at David, or a team of leaders?

Infinitesimus 10y ago
I agree with the sentiment that the article reads as if "This is Yahoo's fault" - not to say they didn't play a role as the parent company. Bottom line here is that Tumblr (with or without Yahoo) failed to monetize their platform. This line stuck out to me as very true reflection of what the Valley sometimes looks like: > Tumblr’s stumbles under Yahoo may go down as a cautionary tale, both for the perils of a large corporation buying a hot startup and for Silicon Valley’s belief that any social network reaching hundreds of millions of people will inevitably generate boatloads of cash one day. There was talk of "We'll make it an advertising platform" but did anyone really ask the Tumblr team "How" ? (I'd love to hear info from any insiders on HN) Makes me wonder how many times a day the execs at Facebook wonder how they can ever monetize expensive companies like Whatsapp.
- rm_-rf_slash 10y ago
  I suspect purchases such as whatsapp to Facebook were less about opening up new revenue streams, and more about locking in potential competitors. Not everybody uses their Facebook account but they may be more prolific on Instagram. They might not like being constantly monitored by Facebook Messenger but even with WhatsApp's end-to-end encryption, Facebook is still provided with valuable metadata, and the more diverse data sources, the more metadata resembles regular, easily interpretable data. It's like Microsoft buying LinkedIn: the market was clearly bearish on the company, but a tech Titan like Microsoft has a lot to gain by keeping its finger on the pulse of potential hires around the world - with a crucial head-start before headhunters can find star performers.
- elliottcarlson 10y ago
  The advertising platform was in development prior to the acquisition, and in my humble opinion, the plan that was in place was not bad at all, and certainly had users best interests in mind as well. I moved off of the ads team when initial integration started with Yahoo, so I don't have as much insight in to this.
mathattack 10y ago
The buck stops at the CEO. If you pay a billion dollars for something, you can't say "They failed to execute before I bought them." Post-purchase execution falls under the CEO too. You can fire the manager, but you can't escape the blame if you're the boss. If you hire a roofing company to fix your roof, and one of the workers screws up, it's still the responsibility of the owner who hired them.
ukyrgf 10y ago
The article pretty clearly says they were failing to monetize because Karp didn't want intrusive ads, so he was happy to get bought out and have that become their problem rather than his.

ivraatiems 10y ago

This article wholly ignores the rampant technical problems with Tumblr and the way that every "fix" for them makes the platform worse. Whether it's removing the ability to post reply chains, the completely broken Web and mobile interfaces, the haphazard rollout of new features, the sudden and unhelpful modifications to the search function's behavior, or the continuous useless pushes for people who are just reading blogs to instead make a Tumblr of their own, the site is far, far off track from where it should be development-wise. Yeah, ads are annoying, and I can't imagine Yahoo has helped matters, but I think the feelings of Tumblr's user base on how it's being modified are a large contributing factor in its decline. Another factor is the failure of Tumblr's staff to appreciate the diversity of ways Tumblr can be used: as a picture blog, as a server status log, as a way of communicating person to person, as a way of communicating person to corporation, as a way of creating funny writing projects or online roleplaying, or just as a content aggregator. All of these are valuable uses of the platform. Not all of them are ever accepted or catered to, in fact, most of them are ignored. I'd like to see more on why Tumblr's dev team does what it does than on why its ads team sucks.

Grue3 10y ago
This comment is just plain false. Pretty much every feature has been objectively improved since Yahoo acquisition. - search is actually usable now, was completely useless before acquisition - new messaging features are better than stuff they had before - rich text editor better than the one they had before (except if you want to edit in HTML or Markdown in which case it completely sucks now, but very few people probably post in HTML or Markdown) - replies, I have hardly ever seen them used before they were removed. in any case, the new implementation is much better - should I even mention the freaking video player? Of course the users will complain, but I mean this is Tumblr, the userbase will complain about everything.
- ivraatiems 10y ago
  You didn't address most of the items I listed, but I will note for fairness' sake that as I said, I'm a former user. I left in November or so. I've heard good things about messaging, but not anything else you mention. Replies were HEAVILY used by my part of the Tumblr community, and the changes to them really screwed things up for us. Like I said, lots of use cases for the site. I certainly don't feel on the whole that tumblr was better when I stopped using it than it was when I started. Even if that is true now, it wasn't true for a long time, so my argument remains the same: its decline is due to inadequate tech work for a long period of time.

fideloper 10y ago

Gosh the writing is so biased I couldn't finish the article. Stating something as fact (oh, a source disputed this), artful use of connotation ("a yahoo source played it off..."), and lastly (where I stopped reading), calling the founder of Tumblr s "20-something". You don't get to call a 29 year old a "20-something". Feels overly sensationalized, even if yahoo is where start ups go to die.

fideloper 10y ago
Huh, sure downvotes. Y'all should be cognizant that there's a human being with their own priorities writing articles liked this. My point in showing how biased this article is so you can remember to take it with a huge grain of sale. Probably less story here than it makes it out to be:
galistoca 10y ago
What would you call him then? 30-something?
- fideloper 10y ago
  29 (which lacks the "too young" connotation the author has placed there)
- dopamean 10y ago
  He's pre-30.
  - selimthegrim 10y ago
    I feel like pre-30 valuation is the new company metric in SV.
- seanp2k2 10y ago
  Twenty nine and three quarters :) I don't think there's any need to add an adjective to it unless the intention is to convey ~"too young; naive; inexperienced" as seems the case here. They could simply say e.g. "John Doe, 29, [...]".

gnicholas 10y ago

Their ad strategy sure did suck. I know this because I really wanted to advertise on Tumblr since many of their users were already posting about my startup and driving tons of traffic (tens of thousands of page views, from posts with 100k+ notes) to my website. I contacted their ad team and was told the minimum ad buy was $25k. I explained the situation and said that given the popularity of our product among the Tumblr community, I had no doubt we could find a revenue-positive way to advertise on Tumblr, but that we couldn't commit to $25k sight-unseen. I never heard back from them. Considering how easy it is to advertise on Google or FB with just a couple bucks, I was shocked that Tumblr is so inflexible. I guess it's not surprising they couldn't get to $100M in ad revenue, since they'll only talk to companies that can afford $25k experiments.

shostack 10y ago
Not diminishing your situation, but respectfully, you likely weren't the target customer-base for their ad sales team at that stage of the game. Sounds like your budget was too low, and you're a direct response advertiser (from the "revenue-positive" comment). That $25k min. spend is a sales qualifier and looks like it was successful in filtering you out in favor of advertisers who don't bat an eye at testing something new for $25k sight-unseen. With big media properties that are being cleaned up, a lot of that early focus is typically on big brands who are doing large branding efforts that have cool and sexy creative and are super customized to the platform. They want to reach lots of people, and the property in turn wants to leverage it as a large case study to attract other brand advertisers. What you were looking for would not help meet their objectives because your budget was likely too small, and because they are a new display-driven property, they don't want advertisers focused on performance. Why? Well, most performance advertisers are not super savvy with how they look at display performance, and would be looking at it from a last click measurement standpoint where it would almost certainly bomb (like most display, social, etc.). Big brands doing branding plays are looking for reach and engagement (or post-impression performance metrics in some cases). This is better for Tumblr for purposes of building case studies and selling in to other big brands, because big brands tend to not care as much about overpriced CPMs, which means more margin for Tumblr. Again, down the line it might have made sense that you could make a lot of money for your brand and might have been a good fit, but realistically, you just weren't their target. Same reason FB weeded out all the crappy affiliate ads to the best of their ability and started pushing big brands for engagement-based stuff.

daniellermm 10y ago

I said it on the day of the acquisition and I'll say it again: Tumblr is the geocities of 2014. Tumblr wasn't even a good company before the acquisition.

jacquesm 10y ago
That means we can expect a shut-down any moment now, given that that's what Yahoo! did to the original Geocities.
- iamdave 10y ago
  Right in the nostalgias, dude. I had totally forgotten about those days...somewhat hoping we don't get a repeat.
- reality_czech 10y ago
  We should get to work right away building an archive. Gotta do it now, before the shutdown hits! We can call it "Bumblr," and it will memorialize all the worthwhile commentary that was ever made on Tumblr. (This should be a megabyte or two of text that we can upload to mega.com.) On the other hand, the Tumblr archive for porn will be called "Fumblr" and it will be hosted in Brazil.
galistoca 10y ago
If you're talking about profits, youtube wasn't a good company before the acquisition, and it still isn't. But it is an important company.
- seanp2k2 10y ago
  Geocities was important too, but I'd argue that it's important socially and not businessly. Users love Tumblr, but there's probably no way to convert that into profits. Same thing with Twitter IMO. Everyone hates promoted tweets, but many love Twitter. In particular, it's great for political dissent and organizing protests. Good luck monetizing that. In the case of SnapChat, tons of their most active and loyal users are in elementary / middle / high school. I was in a restaurant a few days ago an saw 4 children whose shoulders came just above the table sitting there for an hour snapchatting each other, and suddenly the massive user base of it made sense. Again here, good luck extracting money from children inside an app that they very likely try to hide from their parents. In the case of FB Messenger / WhatsApp / Telegram / Line / Kik / Viber / Kakao: this stuff is commodity chat, and the value lies in other people in your network using it. If it's found that any one of them are doing something that users don't like (like showing ads or reading your messages or mining who you're talking to), the users will have no problem finding alternatives. It's like trying to monetize Skype, without the value proposition of being able to call land lines. It's like saying that AOL Instant Messenger was worth $1bn. The value is in the utility of the thing, which crucially, is trivially replaced by a competitor. At least Facebook has the benefit of not requiring returns on messaging and instead pitching it as an integration with their core platform, which is great at getting ads in front of eyeballs. Again here, users love these utilities, but I don't ultimately think that they're economically viable businesses.

relaxatorium 10y ago

I wonder how much the two switches in ad teams correlate to the weird period of time when the ads on Tumblr were about 100% for a weird choose your own adventure cartoon thing?

jwebb99 10y ago

> Some knew the name, but they were hoping to be bought by a trendier tech company... It didn't occur to me that millennials could be oblivious to the existence of Yahoo. (Afterall, millions of people still use Yahoo Mail, Flickr, etc.) > Karp, a coder at heart, is described by colleagues as “openly hostile” to traditional advertising. I suspect Tumblr users, much like Reddiors, are allergic to advertisements. > Traditional marketers... were also skittish about some of the raunchier user-generated content on Tumblr. No shit. In many respects, Tumblr is essentially a bootleg porn site. From Day One, people have cited Tumblr's reliance on "adult content" as a major problem for Yahoo. I thought the would just ban adult content, but then I realized that they can't because they would lose a significant chunk of their userbase.

rgbrenner 10y ago

Yahoo derailed Tumblr? Ok, sure. Just remember where it was when Yahoo acquired it.. $13m in revenue and $25m in expenses for 2012 (net loss of $12m for the year). With $125m raised, and $114m of debt on the books. Yahoo acquired them just a few months after they announced these results for 2012. It's easy to blame Yahoo for Tumblr's problems.. but Tumblr wasn't Twitter or Instagram. It was a tiny business (in comparison).. that without Yahoo very well could have been out of business by now. http://www.businessinsider.com/heres-tumblrs-total-revenue-for-2012-and-how-it-will-make-a-profit-in-2013-2013-1 http://www.businessinsider.com/heres-tumblrs-total-revenue-f...

niftich 10y ago
Context is important. Tumblr had a lot of porn blogs, sure, but most people on it were 15-25-year-olds running personal blogs, interest blogs, and building communities. It was essentially the new Livejournal, but with Twitter-style reblogs. Yahoo knew this, and wanted this demographic for their ad ecosystem. They often thought of themselves as a 'media company', and they liked the creative aspects of the community. They also, wisely, knew that Tumblr users would never accept being forced into using a Yahoo account, so they had to keep the userbases separate. But this meant they couldn't use Tumblr to build Yahoo's social presence and its brand. They'd harvest some analytics, display some very loosely targeted ads to people highly averse to ads, but that mercantilist relationship was all was to be. In that light, they clearly overspent.
harryf 10y ago
But now it's 2016 and services like Tumblr have all gone mobile but Yahoo is killing the Tumblr app by requiring a login as I've explained before here - https://news.ycombinator.com/item?id=11071841 https://news.ycombinator.com/item?id=11071841

dandare 10y ago

Is it just me or is the article desperately trying to find examples of how Yahoo hurt Tumblr only to come up with several trivial gaffes? I once worked in a company damaged by acquisition and it looked nothing like this. Tumblr simply didn't become the exceptional miracle some hoped for - and that is it.

moridinamael 10y ago
Indeed, it seemed like the author was trying to obfuscate that Tumblr had a childish company culture and a barely-innovative and questionably valuable product.

lkrubner 10y ago

Mergers are hard, and "big company buys small company and derails it" is a common story, in every industry. Some historians of the automobile industry (Paul Ingrassia) suggest that Oldsmobile would have gone much further if it had remained an independent company. Wikipedia points out it was the #1 car company, shortly before it was bought: "In 1901, the company produced 425 cars, making it the first high-volume gasoline-powered automobile manufacturer. (Electric car manufacturers such as Columbia Electric and steam powered car manufacturers such as Locomobile had higher volumes a few years earlier). Oldsmobile became the top selling car company in the United States for a few years around 1903-4... General Motors purchased the company in 1908." https://en.wikipedia.org/wiki/Oldsmobile https://en.wikipedia.org/wiki/Oldsmobile John F. Love points out that in mid 1960s Burger King was building twice as many restaurants as McDonalds, and was on track to surpass McDonalds by the end of the 60s. At that time, Burger King had very smart management. However, Burger King was then bought by Hormel, who regarded it as simply a place to dump surplus beef that couldn't be sold through other channels. And that is why McDonalds is the #1 burger company. The software industry is full of such stories. Roomkey.com (it's pre-purchase name was Hotelicopter) might have transformed the hotel industry, but it was bought by a joint venture of Choice Hotels, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International, and Wyndham Worldwide. This joint venture regards Roomkey merely as a bargaining chip to get better rates from Expedia ("Give us better rates or we will invest more in Roomkey".) I could try to list all the innovative startups that Cisco has bought, cannibalized, and then discarded, but it would take me all day. Mergers are the main way that innovation is destroyed in our society. Over and over again small startups are bought, and then killed by the different needs of the new owners.

Doctor_Fegg 10y ago
Just for the record (because it's interesting), it was Pillsbury who bought Burger King, not Hormel. Same applies, though.
seanp2k2 10y ago
I don't want to be a negative nancy here, but does anyone have any examples, preferably in the past 10 years, where a company with cool tech was acquired and did even better because of the acquisition? A company which really thrived and wouldn't have without being acquired? Things like Nest make me cynical that the vast majority of acquisitions end up destroying all the value created before the acquisition by the acquiree. Edit: Android might be an example acquisition success story.

tn13 10y ago

Always loved Tumblr as a porn site and I am not kidding. I found Tumblr's porn blog far excellent in quality than was ad infested, pop-up opening porn websites.

douglance 10y ago

Tumblr deserves it. The format encourages one-up-manship that leads toward every escalating victimization and identity crises in its users.

dang 10y ago

Several users have complained about this article being overly biased, so we've replaced the one bit of it we can (its title on HN) with a slightly more neutral phrase from the text.

hugh4life 10y ago

My issue with tumblr is that the search interface for it is awful and google/bing miss a lot of posts.

iomike 10y ago

It's not shocking. They did the same with Flickr and a bunch of the blogger-backed startups in the mid-00s