On Thursday, AllThingsD broke the news that Yahoo! is in serious talks to acquire Tumblr. This comes on the heels of failed acquisition attempts and acquisition rumors that Yahoo! CEO Marissa Mayer had her eye on Daily Motion (that acquisition was blocked in France), Hulu, Pinterest, Zynga, and more. It’s speculated that a Yahoo! acquisition of Tumblr could reach $1 billion.
This news comes shortly after Yahoo! CFO Ken Goldman told the audience at the J.P. Morgan Global Technology, Media and Telecom conference in Boston that his company is launching marketing campaigns directed at the 18 to 34 year old audience with a single goal — to up the Yahoo! brand’s cool factor. Interestingly, it also comes at the same time Mayer published an article on Yahoo! Yodel announcing a new partnership with Twitter that would bring relevant tweets directly into the Yahoo! news feed.
Tumblr is extremely popular among the younger demographic that Yahoo! wants to connect with. It’s also a content generation machine — a product that Yahoo! can fit seamlessly into its business model. Tumblr has yet to be fully monetized, and that is something Yahoo! surely finds attractive about a possible investment or acquisition.
The question is whether or not a Tumblr acquisition is the right move for Yahoo! Naysayers are quick to point out the company’s track record of acquiring and damaging brands (e.g., Flickr). However, people on the other side of the argument see a Tumblr acquisition as a natural fit for Yahoo! And yet another angle pundits are discussing is the large price tag for a product that gives Yahoo! more of the same — user-generated content — but doesn’t diversify the company into products that will carry it into the future. In other words, they wonder if Tumblr is too safe and suggest that Yahoo! needs to make a bolder move to thrive rather than simply survive in years to come.
What do you think of a Tumblr acquisition by Yahoo? Leave a comment and share your thoughts.
Image: Josh James
Lucy is Editor at Corporate Eye
