Yahoo! Adds Tumblr to Its Portfolio - The UpStream

Yahoo! Adds Tumblr to Its Portfolio

posted Tuesday May 21, 2013 by Scott Ertz

Yahoo! Adds Tumblr to Its Portfolio

Yahoo began their previously announced press event by talking about the confirmation made earlier in the day, that Yahoo has purchased Tumblr. The announcement came as no shock to anyone; the rumors had been circulating all week about the talks, even including pricing. As it turns out, all of the rumors were correct, with the deal being finalized and pricing falling within the expected range.

One of the biggest concerns about a company like Yahoo purchasing a brand like Tumblr is always whether or not the purchaser will ruin the brand. We have seen many purchases of this type go badly. Take, for example, Yahoo's purchase of Flickr. Before the purchase, Flickr was the place for photographers to show off their work; after the purchase, Yahoo had changed the service so much that it was unrecognizable. The product had gotten so difficult to use that books were written to explain the functionality; certainly not what you would expect from a casual use photo site.

Marissa Mayer, Yahoo's CEO, recognized this trend in the industry and made a bold statement. She said, in regards to the purchase, that she promised "not to screw it up." That says a lot about the company - they are aware that they have done wrong in the past but want to work to correct it. Only time will tell as to how well this will work, but their commitment seems strong. After analyzing how previous successes and failures have gone, the decision was made to keep Tumblr as a separate group, managed independently.

Tumblr will remain so independent that the team will not be moving into Yahoo's new Times Square offices with the rest of the Yahoo, but instead will remain in its current location. The best example of an acquisition that was at least usability-wise successful was Google's purchase of YouTube. The same decision was made in that case, and YouTube, for the most part, has been a successful pairing for Google. While no major input was made from Google in to YouTube, Google was able to use YouTube's user base to enhance its own search result relevancy. YouTube's emphasis within Google's search results, however, has been a point of contention for the government, resulting in an anti-trust suit.

My guess is that Yahoo intends to use the data generated by Tumblr to help enhance the relevancy of their top stories for the homepage and mobile news services. As Yahoo enhances their other services, making their homepage more relevant is a major task; it could be the difference between Marissa's turnaround plan being a success or failure.

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