By now, you have heard that
) CEO Marissa Mayer just made her seventh and perhaps most
important acquisition during her tenure: A $1.1 billion acquisition
of Tumblr, a blogging network based in New York. This acquisition
marks a major turning point for the Internet media giant.
To say that reactions vary is a massive understatement. To sum up
how different constituencies reacted, we'll illustrate in classic
Tumblr fashion: the GIF.
The venture capitalists that got in early were all like:
Understandably, getting a 100% cash buyout is the best possible
outcome for Tumblr, which had so little revenue to date that it
won't have an easy time going public. Last year, Tumblr pulled in
in revenue. So the VCs are taking a well-deserved victory lap.
On his own
, VC Bijan Sabet of
praised CEO David Karp for his business style, which was always a
far cry from being motivated by profit. In an interview, Karp
that the Web advertising that keeps the lights on at Yahoo "really
turns our stomachs."
"Over these years, being an investor and board member in Tumblr has
taught me many things," Sabet wrote. "I learned the importance of a
founder-led company. I learned that it's best working with people
you admire and care for. And I learned there is more than one way
to build a company."
Also on Tumblr, Union Square Ventures partner Alex Wenger is
excited about the two companies benefitting from each other.
"When Marissa took over Yahoo, I expected that acquisitions would
play a role in her transformation of the company,"
. "At the time I wrote that the ideal target would be 'startups
that have very talented people and also interesting products but
could benefit from the scale of Yahoo.' Tumblr fits that bill
Fred Wilson, the superstar tech investor and must-follow blogger at
USV didn't mention the Tumblr deal specifically, but put in his
about investors taking the credit.
"1 -- the management team always gets the credit. VCs don't do the
dirty work and should not get the accolades when things work out. 2
-- don't gloat. It's not becoming. Humility in times of great
success is a very becoming characteristic," he wrote.
As far as the stock market goes, the needle barely moved following
the deal's announcement. You might say that the glass is half full,
and the stock market in general is OK with Yahoo putting over $1
billion in cash into a startup. Or if the glass is half empty, you
might say that this isn't the game changer that it should be. Only
time will tell.
Household-Name Tech CEOs
Mayer and Karp together posted a cheeky GIF on the news that they
made over the past month.
They made light of the two companies' vastly different cultures:
Mayer has famously
the option of working from home for Yahoo (thus her "WFH" speech
bubble), much to the ire of moms who work there. And much of Tumblr
is extremely Not Safe For Work (NSFW).
Several reports raised the issue of the conflict between Yahoo's
more buttoned-up family-friendly image and Tumblr's more edgy
content, but Mayer seems to be fine with the
plethora of porno
on Tumblr. "It's really important to have great community tools
like 'NSFW' that Tumblr already has in place," she said. Looks like
that isn't about to change.
On Mayer's newly minted Tumblr, she didn't glaze over the fact that
it might not sit well with users and vowed
"not to screw it up."
Tumblr staff blog
also tried to subdue worries that the two cultures would crash.
"Before touching on how awesome this is, let me try to allay any
concerns: We're not turning purple. Our headquarters isn't moving.
Our team isn't changing. Our roadmap isn't changing," Karp wrote.
"And our mission -
to empower creators to make their best work and get it in front
of the audience they deserve
- certainly isn't changing."
his excitement that the deal "turned the Times blue."
Users' reactions were mostly not positive.
Yahoo has a history of buying startups only to neglect them. This
from a brilliant blogger pretty much sums up the way many Tumblr
users felt when the deal was confirmed. There were plenty of
posts tagged #yahoo
Users are concerned that getting acquired by a big ancient
corporation is going to kill the quirky nature of Tumblr and the
community based on self-expression (among other things).
Surprisingly, most the sites we identified as
The 18 Best Financial Tumblers
last December said nothing about the Yahoo purchase.
In 2005, it acquired Flickr for $35 million, and today, Flickr is
the likes of Instagram and even Imgur. It's hard to explain to the
young'uns how cool Flickr used to be. Before Flickr, you needed an
old-school FTP client just to put a photo on your blog. Speaking of
on that list, too. After spending
buying the proto-blogging platform that gave all of us our first
awful websites, Yahoo shuttered the whole thing in 2009. Tumblr
users are afraid this might happen again.
But before you teens join the herd and
move your blog to WordPress
, note that Yahoo just gave a signal that it's serious about
keeping its beloved media properties awesome. On Monday afternoon,
Flickr mailed its users that they all now have a terabyte of space.
At this point, nobody can judge Marissa Mayer's acquisition. As a
) executive, she definitely saw how strategic acquisitions (such as
YouTube and Android) can pay massive dividends, so she probably
knows what she's doing.
Mayer is hoping that the deal will be as smooth as Google's
purchase of YouTube, which lacked substantial revenue in 2005, but
is a major part of Google's portfolio today. As she promises to do
with Tumblr, Google mainly left YouTube alone for years. Hopefully,
for the Internet's sake, this acquisition will turn out more like
YouTube than Geocities.