Here's my perspective as a hardcore tumblr user -<p>Tumblr is a good example of an 'uncontrolled platform'. What started as a beautiful blogging platform, has now turned into a junkyard of cat memes, 'blurr-photo-in-the-background' quotes and animated GIF thumbnails of movie snapshots and softcore pornography. Of course your feed depends on what/who you subscribe to..but due to the nature of Tumblr's platform, even the best blogs sometimes reblog either of the junk above, which makes the platform very painful to use. Sometimes, it takes upto 5 whole minutes to load the entire dashboard. Also tumblr has a terrible UX implementation site-wide (Example - if you want to enable the ability of your followers to answer your post, it's title should end with a question mark, after which a tiny checkbox will pop-up from no-where which you can then click to enable answers.)<p>In my opinion, $1.1 Billion is a really good deal for a trashcan full of 99% animated cat GIFs and 1% decent content. Rejecting it could be a bad idea as far as I know. Yes Instagram was over-valued, but hey, atleast it didn't come with animated cat GIF's.
> Tumblr feels that Yahoo’s $1.1 billion offer as “too low” and view it as “only a first offer”<p>And then later in the paragraph:<p>> sources say the company only has a few months of cash runway left.<p>This must be a joke. If you have a few months of cash runway left, $1.1B is more than enough. Seriously. There is no circumstance when this isn't true, unless you have massive non-cash assets on hand.<p>Yes, I'm aware that they could go raise more money and try to hold out for more, but let's be serious here: they make (effectively) no money and they're being offered well over a billion dollars. Billion -- with a 'B'. This sort of public posturing is just obnoxious.
If I were a Yahoo shareholder, even at a $1.1bn price tag, I would vote against the acquisition.<p>> Tumblr has no real revenue, let alone profit, making it a value dilutive acquisition for Yahoo.<p>> The acquisition price is artificially being inflated by investors who are trying to squeeze Yahoo, who is trying to "turnaround" its profitable business. The $1.1.bn price is already "too high" for Tumblr's true underlying value.<p>> Yahoo has no track-record of successfully acquiring, integrating and generating value from such acquisitions. Broadcast.com ($5.7bn), GeoCities ($3.6bn), Inktomi ($235m), Overture ($1.6bn), del.icio.us ($20m), Flickr ($?m), and the list goes on.<p>I feel sorry for Yahoo's retail investors. I guess "greed is good" when it comes to startup acquisitions.
I see a lot of people talking about Tumblr's userbase rather than the quality and potential profitibility of this userbase. As someone who has worked in brand management at P&G, i do not see any major consumer brand who's personality fits with lol cats and porn, therefore which major brand are you going to find to put ads next to that crap. Secondly lets take a look at the demographics and LSM's, tumblr is mainly made up of teenagers, you need to look at your ad spend relative to the quality of the demographic.<p>Start a successful extreme sports website and you will find brands like redbull that's brand fits in with your message, start a music sight and you will find a brand like pepsi that fits in well. Tumblr is all over the place, i have no idea how do you control the message? This website was built to just be cool and over the last six yrs they never tried to tie their identity to the type of revenue model they were anticipating. The reason for this is because they did not think of monetization at all. If you started a magazine back in the day, you would choose your segment and also tie in the magazines identity with the type of ad revenue you want to generate like a house & home magazine, you have home depot etc. This is not a billion dollar company. I am rooting for Marissa but her social media profile is starting to look bigger than her bite.<p>I will also add that Tumblr did try their had at curated content a few months back but decided to scrap the idea. This shows that they understand the need for more quality consistent content but are unable to execute. Flipboard has totally taken them to school on this front by allowing people to create personal magazines and you find a better quality experience. They need to learn some stuff from Flipboard even though it is not 100% comparing apples to apples.
Has there ever been an acquisition similar to Tumblr (company that has existed for 5+ years that hasn't found a profitable business model) which has contributed positively to the acquirer's net income? Is there any chance that this cannot turn out to be a boondoggle, because that seems to be the consensus among the commenters on HN.
In response to some of the critics:<p>For a good user-generated content comparable, YouTube wasn't profitable until around 2010-2011[1], 7 years after its founding. It is, of course, very profitable now and looks like one of the best acquisitions ever made in the internet space. Google only had to fork out $1.65Bn in an all-stock transaction for a company which would now be worth many, many times that (some numbers would say over $50Bn [assuming $5Bn income at a conservative 10x P/E],[2] I would say many times more).<p>Revenue is, of course, a massive lagging indicator in the software industry. I think anyone who sees Tumblr as being overvalued greatly underestimates the sheer size of their user-generated content library, especially because most popular externally-facing Tumblr sites have custom URLs which hide the true size of the network. Most regular internet users will visit Tumblr many times throughout the day without noticing it. You have to remember that its Alexa rank has been climbing non stop over the last few years, and it is now at 19 in the US with a steady pageviews/user count (which not even Facebook can claim).[3]<p>[1] <a href="http://www.reelseo.com/google-ceo-eric-schmidt-claims-youtube-profitability/" rel="nofollow">http://www.reelseo.com/google-ceo-eric-schmidt-claims-youtub...</a><p>[2] <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/05/3591307/update-morgan-stanley-raises-pt-on-google-on-rising-valu" rel="nofollow">http://www.benzinga.com/analyst-ratings/analyst-color/13/05/...</a><p>[3] <a href="http://www.alexa.com/siteinfo/tumblr.com" rel="nofollow">http://www.alexa.com/siteinfo/tumblr.com</a>
Just because Tumblr is an established platform with a lot of users doesn't make it worth one billion dollars. Who are they kidding? Yahoo! is offering them more money than the service which will be a nightmare to correctly monetise is worth.<p>Considering Tumblr is a waste dump of animated GIF's and memes it's only a matter of time before something new and hip comes along and Tumblr becomes another Geocities.<p>Remember Geocities? Yahoo! paid 4.6 billion for it back in 1998 and then it lagged behind and got shut down. 4.6 billion down the drain, Tumblr will be the next Geocities and the novelty of a free blogging platform all the hipsters used to use before something cooler and new came along will wear off like Myspace when Facebook took off.
I've been using tumblr as my blog platform for nearly 4 years because it allows easy mobile posting and via emails which makes my posting easy. Yahoo buying tumblr will ruin tumblr for sure like yahoo has done go the past with Flickr and Delicious. Yahoo need to innovate and make things happen rather than buying everything just because they have money. Just imagine what would have happened to Facebook if Yahoo bought it back then. Yahoo is like the uncool kid who used to buy the lunch of cool kids so he can sit with them
Tumblr is, globally, in the top 50 websites by traffic, and in certain major cities it's in the top 20. Yeah, it's mostly full of cats, angst and porn, but the user base is both large and dedicated.
It would be bad karma to accept a $1 billion offer from Yahoo.<p>Previously Yahoo have made tree $1 billion offers, one to each of eBay, Google and Facebook. All where turned down, and for all it turned out to be the right ting to do[0].<p>0: <a href="http://www.inc.com/allison-fass/peter-thiel-mark-zuckerberg-luck-day-facebook-turned-down-billion-dollars.html" rel="nofollow">http://www.inc.com/allison-fass/peter-thiel-mark-zuckerberg-...</a>
It makes makes me sad that tumblr is even considering selling to yahoo. I found Tumblr useful as a simple blogging platform in which other users could "vote" on content they liked.<p>Someone should build a straight up reddit-for-blogs.
If they end up buying them, I'd gladly contribute some money or computation power towards archiving the site. I have way too many bookmarks, likes, and other things tied to the service.
Tumblr's revenue in 2012 was $13M and negative profits (they are actually losing money).<p>They "expect" $100M revenue and $60M profits in 2013.<p>Even if their expectations work, whoever offered them $1.1B is a complete idiot.