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The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr
- lizzard 13y agoThis reminds me of Excite@Home buying Blue Mountain Arts and Webshots because they got a lot of hits. How incredibly not useful!
- carbocation 13y agoAssuming this is true, does the 1.1 billion in cash tell us that this is purely about the property and not in any way about the team, or is that over-reading / misreading the tea leaves?
- lmm 13y agoNope, there could still be vesting periods/golden handcuffs etc., this just means it was cash rather than Yahoo stock. It tells us that Yahoo preferred to spend cash than stock, or Tumblr's founders wanted cash rather than Yahoo stock, or a combination of the two, which can be a starting point for any amount of speculation.
- sudonim 13y agoHow 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.
- fatjokes 13y agoI 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.
- dsaint 13y agoThey integrated Summly into their Yahoo iOS app within 30 days of acquisition. They're using it to provide summaries of news articles in the app.
- fatjokes 13y agoCorrect me if I'm wrong, but didn't they integrate "Summly's summarization technology" into their app, which was licensed from SRI?
- itsprofitbaron 13y agoYahoo employees can't keep secrets and are always leaking things to AllThingsD (a sister company to WSJ).
- jcdavis 13y agoYahoo is leakier than most - Kara Fisher seems to know anything that happens there
- brown9-2 13y agoThis isn't an unsolicited deal, the CEO brought it to the board for approval after completing negotiations. This is a done deal now, it's not the start of Tumblr's bidding process.
- minimaxir 13y agoI'd recommend watching the #yahoo! feed on Tumblr in order to watch the Tumblr community's reaction, and see the inevitable hilarity. (Not providing a link due to high probability of NSFW content. Search for #yahoo! on Tumblr.)
- lucisferre 13y agoThey've started a petition... http://www.ipetitions.com/petition/stop-yahoo-from-buying-tumblr/?utm_medium=email&utm_source=system&utm_campaign=Send%2Bto%2BFriend http://www.ipetitions.com/petition/stop-yahoo-from-buying-tu...
- _ak 13y agoHas any internet petition ever worked?
- ricardobeat 13y agoFor issues where a public petition might matter, yes. Usually they serve as social proof to press lawmakers and other public figures to deal with something. Quantifying popular opinions/demands is a powerful tool. In this case it's just a pointless show of anger by teenagers.
- LinaLauneBaer 13y agoYes. It more or less saved Germany from internet censorship. http://www.netzturbine.de/en/internet/zensursula-deutsches-internet-ist-gegen-zensur-und-epetitioniert-bundestagzensursula-german-internet-rises-against-censorship-and-does-epetition-bundestag http://www.netzturbine.de/en/internet/zensursula-deutsches-i...
- _ak 13y agoI was actually thinking about petitions about private companies and their business decisions, not politics. If Tumblr or a Yahoo had their own corporate petition platform, then yes, but comparing a petition on some random website with a petition on the website of the German Bundestag is like comparing apples to orangutans.
- inmygarage 13y agoThoughts on why this was an all-cash deal as opposed to similar comps (Instagram, YouTube) which were cash/stock mix?
- RexRollman 13y agoMaybe they don't have faith in Yahoo's future?
- pavs 13y agoOr maybe yahoo's stock is not as sought after like it was for google (and still is)?
- keiferski 13y agoMy best guesses: 1. Yahoo would rather spend cash than stock (possibly because they anticipate Yahoo stock going up in the future). If Yahoo thinks that $1 in stock today will be worth $2 in 3 years, it might make more sense to spend cash. This is a huge gamble, of course. 2. Cash is intrinsically more valuable than stock; in other words $1 cash != $1 stock. Yahoo may feel more comfortable spending $1 Billion cash than spending $2 Billion stock. 3. The obvious, but maybe too obvious, answer: Tumblr doesn't see a future in Yahoo stock.
- deleted 13y ago[deleted]
- steven2012 13y agoThis doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired. Cash is much more valuable than stock. Any CEO worth their salt would ALWAYS issue stock and never cash, since stock is essentially free (with some GAAP repercussions, but better that then spend cash). But it sounds like tumblr wanted cash instead of cash/stock. It doesn't matter to the employees, they get paid out from the purchase, and then will all get YHOO retention stock options when they join. Great deal for tumblr, terrible deal for YHOO, it's a waste of cash and as someone else pointed out last week, it's reminicient of Geocities from the dotcom days. Every employee from tumblr will start exiting, maybe after 2-3 years, and the entire thing will fall apart. I'm disappointed in Mayer.
- jamescun 13y agoI 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.
- copper-horse 13y agoAs 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.
- dave5104 13y agoAnd 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.
- pavs 13y agoAccording to the verge there is a flickr redesign coming up soon: (check update2: http://www.theverge.com/2013/5/17/4341144/yahoo-to-hold-monday-press-event-nyc-tumblr-acquisition-rumors http://www.theverge.com/2013/5/17/4341144/yahoo-to-hold-mond...)
- greghinch 13y agoThe updated Flickr iOS app is pretty awesome, and exactly what Flickr needed.
- jalev 13y agoMaybe Yahoo's involvement with Tumblr will be limited, much like Conde Nast's management of Reddit.
- deleted 13y ago[deleted]
- _ak 13y agoHow pre-posterous (pun intended).
- mani27 13y agoYahoo 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.
- pavs 13y agoI 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.
- minimaxir 13y agoPer AllThingsD, "There were no other competing bids, despite reports, to snap up the New York-based hipster blogging service." http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-approves-1-1-billion-deal/ http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...
- pkmehta 13y agoCan 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?
- sharkweek 13y agoMaybe if they let it die, the service slowly dies too, and then the audience leaves -- Assuming that's kind of what Yahoo is after in the first place; but I'm completely guessing here
- bretpiatt 13y agoAll cash does not mean there isn't a portion of it restricted to a time or objective based schedule for key employees (or even all employees and shareholders). If they intend to continue operating it (highly likely) buying while they are still with cash, all of their staff, and vibrant is quite possibly a better outcome than buying a broken company for less even only a few months later. Disclosure: I am long Yahoo in my personal portfolio and I've led many M&A activities for Rackspace.
- diego 13y agoIf you and Marissa Mayer want the last burger in the world, how much is it worth? What if you're Mark Zuckerberg, and it's really important to her that you don't get a taste of that burger? Maybe she doesn't even like burgers. Factors like the cost of the burger, or how fresh/tasty it is, become less important. Also, all-cash doesn't mean what you think it means. The currency used to pay for a company (cash, stock, pork bellies, whatever) is independent of the vesting schedules of the employees/founders acquired. Typically investors receive most stock/cash immediately, while employees receive some up front and the rest over a period of time that is negotiable. 3-4 years is standard. Some deals are front-loaded (more than 50% in the first half) and others are back-loaded (the reverse).
- mani27 13y agoThe rate at which Yahoo is buying out companies for talent acquiring , I wonder what must be going through minds of engineers at yahoo.
- jmduke 13y agoA rising tide lifts all boats. 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.
- mani27 13y agoLooks like then some major changes at Yahoo expected.
- k_kelly 13y agoAs 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.
- mani27 13y agoYahoo unlike google doesn't gives that much freedom to engineers to work on their own ideas. Engineers can't make much difference, if same managers who are not doing much now are present. Some major revamp of workforce starting with managers is needed.
- Choronzon 13y agoHowever big crazy engineering projects require money which is been sunk into dumb social purchases instead.I can imagine it killing internal engineering morale also.
- gdilla 13y agoWow, in light of the recent (rumor?) that FB was going to snap up Waze for $1B, this seems like a steal.
- SimianLogic2 13y agoSeems smart--most of what I use Yahoo for nowadays is content (Y!Sports, Y!Finance), and Tumblr adds a lot of content.
- elorant 13y agoR.I.P. Tumblr
- zaidf 13y agoThis 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.
- gnok 13y agoI 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.
- patrickaljord 13y agoGoogle is just getting started with Motorola so it's too soon to tell and I'm pretty sure that Blogger has been a huge success (through adsense) and many successful blogs uses it. It went down though since Facebook and Twitter for obvious reasons but the same thing happened to most blogging platforms.
- djrogers 13y agoI'm sorry, but in the 12 months since the acquisition was announced, MOT has lost pretty much every court case it's been in, had patents invalidated, has been passed over by google for 4 (might be even more?) flagship 'nexus' products, and hasn't built/shipped/teased a single thing newsworthy. You can't seriously be arguing that this has gone well?
- bambax 13y agoMaciej Cegłowski: "Marissa Mayer secretly named Google employee of the month for third month running".
- DocG 13y agoI most curious what does it mean for me, as tumblr poster. Couple of months ago I started OC artwork blog on tumblr. Now I must probably wait until this things settles, to know is it worth investing my time or not, what changes they are going to make etc.
- fatjokes 13y ago(╯°□°）╯︵ ┻━┻
- yahooer 13y agonice deal
- yahooer 13y agorely myself
- seiji 13y agoHow 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?
- icebraining 13y agoFrankly, I don't get your position. 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?
- seiji 13y agoHow exactly are the Yahoo! workers exploited? I think that's between the employee and their own view of the world. If you worked at Yahoo for six years doing something, anything, and then Yahoo buys a six year old company run by a 26 year old for a billion dollars — what were you doing the past six years? Couldn't it have been you? Why not? Every computer person employed by a company isn't generating a million dollars a year in value, but most could if they were pointed in the right direction. Even those who are generating 10x to 1000x the value of their salary aren't compensated proportionally (hence, why startups exist).
- loceng 13y agoBecause you were working at a company, and not taking the risk building your own.
- jiggy2011 13y agoThere's no foolproof way to know what will generate value ahead of time. Sometimes in order to use their skills to generate value a developer requires resources ahead of time that only a large company can provide. If you work on a failed project as an employee, then at least you got paid a salary during that time. As a startup founder you walk away with nothing.
- sethbannon 13y agoThis 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.
- dmor 13y agoHow 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. [1] http://techcrunch.com/2010/11/19/tumblr-funding-office-hires/ http://techcrunch.com/2010/11/19/tumblr-funding-office-hires...
- jcampbell1 13y agoThe 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.
- dmor 13y agoConsidering Marco left Tumblr a year before [1] they raised their last $85M round at $800M valuation [2] do you you think it realistic/possible that he had 1/8th the company after that deal? [1] http://techcrunch.com/2010/09/21/marco-arment-instapaper/ http://techcrunch.com/2010/09/21/marco-arment-instapaper/ [2] http://techcrunch.com/2011/09/26/tumblr-raises-85-million-round-from-richard-branson-vcs/ http://techcrunch.com/2011/09/26/tumblr-raises-85-million-ro...
- ralfd 13y agoI wonder how much shares he has. Two days ago he tweeted that: https://twitter.com/marcoarment/status/335483318311194624 https://twitter.com/marcoarment/status/335483318311194624 > @ericf @jsnell 1) I was technically an employee, not a founder. 2) My shares were from the first funding round, before any further dilution. How much shares would a (number 2?) employee typically get? And does it mean his shares were diluted or not?
- dmor 13y agoThe 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. 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-on-tumblr-acquisition-by-yahoo-wall-street-journal-publishes-questionable-headline/ http://www.daniellemorrill.com/2013/05/in-race-to-be-first-o...
- Zigurd 13y agoYahoo has to make acquisitions like this. 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.
- uthgard 13y agoDoes 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. 1. https://www.hnsearch.com/search#request/submissions&q=tumblr&sortby=create_ts+asc https://www.hnsearch.com/search#request/submissions&q=tu... 2. http://www.quora.com/Tumblr/How-did-Tumblr-get-traction http://www.quora.com/Tumblr/How-did-Tumblr-get-traction
- orangethirty 13y agoA 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.
- deleted 13y ago[deleted]
- return0 13y agoAs 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).
- burgreblast 13y agoInstagram was growing rapidly and threatening FB as the place to share pics. Tumbler is declining.
- imjk 13y agoYeah, we've all seen this story played out many times. It's a move that's good for the short term but terrible for the long term.
- tnuc 13y agoWhat you are describing sounds like what happened to GeoCities.
- adventured 13y agoTumblr is GeoCities, circa 2010. And that's why Yahoo purchased them of course. Nothing has changed about the nature of what Yahoo is. The only thing Mayer is doing is collecting a new group of properties to replace the stagnant old ones. It's not brilliant and it won't get the earnings flowing.
- camus 13y agoI dont understand why Yahoo would need Tumblr , nor i got why they bought Summly the price they paid. Is it to look relevant ? Yahoo has a ton of services, a ton of engineers and apps that could do better if they were made better. Yahoo still feels like it is 1999. Why not work on yahoo mail and make it relevant ? groups and make it relevant ? what about their ugly homepage ? I mean there is a ton of things to do, instead of buying things like Tumblr. Marissa is cute and intelligent , but what's her strategy for Yahoo? At that rate , she'll be out in a year.
- smegel 13y agoThey need a social network. Badly. All their other services, including email, belong to a bygone era (with the exception of acquisitions like Flickr).
- camus 13y agoWho do they need a social network ? are people going to move from Facebook or Twitter to Tumblr? No. They need a good an new idea , an innovative product that will draw attention. and a consistent strategy . People are fed up with social networks ( i.e. Google+ ). Tumblr is not valuable at all for advertisers , unless you are selling porn... What's Yahoo mobile strategy ? What's Yahoo's cloud strategy ? ect ... I see no strategy , only buzz ... I'm sure plenty of engineers at Yahoo have great ideas ,it's just feel like what's really broken is Yahoo's management. Why would they pay that much for Tumblr, really ?
- lmm 13y ago>are people going to move from Facebook or Twitter to Tumblr? No. Huhwhat? Of course they are. Do you not have friends doing this already?
- waterlesscloud 13y agoI have zero friends that have left Facebook or Twitter for Tumblr. I have a number of friends that have added Tumblr, but they haven't left anything.
- benackles 13y agoWe'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.
- madaxe 13y agoThis just in: Internet giant purchases consumer web app with no revenue streams and no profits. Swear I've read this story a hundred times in the last decade. Has there been a single acquisition of this nature which has resulted in a profitable outcome for anyone, except for the VCs?
- adventured 13y agoThis 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.
- jasonlingx 13y agoWill they let the porn stay?
- DigitalSea 13y agoI 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.