Yahoo!

The Internet giant without portfolio has finally gotten into the social-media mix with its purchase of micro-blogging site Tumblr. Or so news reports tell us.

From Tuesday’s New York Times:

 

A Flashy Bet for Yahoo on a Shift in Social Media

Yahoo’s $1.1 billion proposed acquisition of Tumblr is a huge coup for the young founder of the even younger start-up and a splashy move by Marissa Mayer to shake up her company.

It also heralds a larger shift in social media. Facebook arguably invented modern social networking, and is still the king. But increasingly its approach is seen as passive and outdated as people flock to sites like Tumblr where they can be more actively engaged in creating personal, expressive content to share — and which could potentially translate to advertising dollars.

“People love a stage or a pulpit from which they can broadcast,” S. Shyam Sundar, a director of the Media Effects Research Laboratory at Pennsylvania State University, explained. “The genie is out of the bottle. Everyone loves it and it’s very seductive for users to get online and be a source of content, rather than just consuming passively.”

 

So far, so good. Except Yahoo! is preternaturally adept at screwing up what it acquires.

The Times chose this for its history lesson:

 

But Wait. Didn’t Yahoo Try a Deal Like This Before?

When Yahoo announced its headline-grabbing acquisition, it boasted that the deal gave it access to an “unduplicated” audience of users and that its target was a “popular personal publishing” platform.

“Yahoo will be able to integrate and distribute a powerful set of state-of-the-art editing tools and content published through personal home pages in an array of services,” the company declared.

But Yahoo wasn’t talking about Tumblr. Those quotes came from a news release Yahoo issued in 1999 when it acquired GeoCities, which allowed users to create their own Web pages — not unlike Tumblr — for $3.6 billion in stock. The site was closed in 2009.

 

According to the Times report, both Yahoo and GeoCities were money losers at the time of the merger, and “both companies had loyal followers that quickly left in droves.”

Fair enough. But an even better case study comes from Gizmodo:

 

How Yahoo Killed Flickr and Lost the Internet

Web startups are made out of two things: people and code. The people make the code, and the code makes the people rich. Code is like a poem; it has to follow certain structural requirements, and yet out of that structure can come art. But code is art that does something. It is the assembly of something brand new from nothing but an idea.

This is the story of a wonderful idea. Something that had never been done before, a moment of change that shaped the Internet we know today. This is the story of Flickr. And how Yahoo bought it and murdered it and screwed itself out of relevance along the way.

Now Yahoo has a chance to do the same to Tumblr.

This time, though, the murder weapon will be native advertising.

From MediaPost:

 

Yahoo To Ramp ‘Native’ Ads On Tumblr

With its $1.1 billion acquisition of Tumblr, Yahoo on Monday made clear that it plans to allow the blogging service to continue to operate as a separate business and brand. That includes no Yahoo branding on Tumblr. At the same time, the Web portal will look for ways to integrate advertising, search and content management on the back-end to bolster growth across both companies.

 

Except listen to Tumblr founder David Karp three years ago (according to the Times): “We’re pretty opposed to advertising . . . It turns our stomach.”

Yes, well, bring on the Pepto-Bismol, because here’s what Yahoo CEO Marissa Mayer doublespoke yesterday: “It’s easy for us to imagine engagement on the core site will improve as we integrate this content.”

Translation for the monetized-impaired: We will wring every dollar possible out of Tumblr.

And likely watch it Flickr out in the process.

 

John R. Carroll is media analyst for NPR's Here & Now and senior news analyst for WBUR in Boston. He also writes at Campaign Outsider and It's Good to Live in a Two-Daily Town.
John R. Carroll has 305 post(s) on Sneak Adtack