Called it. Kinda. I was mostly facetious about Twitter, but Tumblr makes a kind of sense for Yahoo’s acquisition. Words like ‘hip’ and ‘cool’ get tossed around for a microblogging service that was the hot thing in Brooklyn a few years back and is best known these days for its endless supply of animated GIFs. But the question is…is it worth $1.1 billion cash?
To Yahoo, maybe. Tumblr exists in a space between full-scale blogging and Twitter. It works well on mobile, both for reading and posting, and like Twitter bought a best-of-breed iPhone app to revise into its official client. It has a simple mechanism for reposting, favoriting and commenting. Lightweight and lean, it’s as much blogging client as most folks need, and I probably could have done all my blogging there as easily as on Moveable Type or WordPress. Little bit blog, little bit social network, little bit mobile – all things Yahoo could use some help with.
Meanwhile, Tumblr is just now starting to monetize itself – ads, sponsored posts that started cropping up around a month ago – but hasn’t made any kind of money yet. For Tumblr, this is the likeliest exit strategy they were liable to get. Probably not as much as the investors were hoping for, but Tumblr is a fairly mature company; if the big blowup was going to happen it would have happened by now. This is their big blowup, and it’s of a piece with the modern Silicon Valley: the endgame is less IPO than acquisition by somebody with plenty of cash. And Tumblr didn’t have an obvious suitor. Yahoo may not be the prettiest girl in the world, but she’s the prettiest girl in the bar and it’s getting late.
The obvious model is Facebook buying Instagram – they threw a quick billion to get right in mobile, and so far have largely left it alone. Rumblings are that Yahoo will do the same thing with Tumblr, leave it to its own devices for now and not try to force it into the Yahoo model. One tends to hope it doesn’t work out like last time – del.icio.us and Geocities and Flickr didn’t really flourish under the purple Y. But that was before Marissa came to Sunnyvale, and if the model is Google acquiring YouTube, then this might work. YouTube and Instagram were obvious goods, though – easy video and mobile photo sharing – and Yahoo’s going to need to make a bigger and better case for what Tumblr’s for if they’re going to realize $1.1B worth of value for their new toy.