Wednesday, May 22, 2013

Some Thoughts About Yahoo! Buyout Of Tumblr

I am not used to comment fresh news on this blog anymore, as my schedule don't really allow me to write on a daily basis. Nevertheless, there has been a lot of buzz around the buyout of Tumblr by Yahoo! those past few days. 

I have never really used Tumblr, even though I reckon it is a great service, as I already owned my blogspot blog, which I find to be fine for my usage. I followed a bunch of blogs on the service. Probably Tumblr was a fresher and more adapted blogging service than the historical ones, and this is the reason why it works so well.

  • Yahoo has probably made the moves in order to strengthen its audience, especially leveraging the social media hype. Yahoo has for sure a strategy based on content. They have abandonned their own search engine, and is the 4th world most visited web page. But how will Yahoo find synergies between its actual services and Tumblr? It seems difficult to tell.
  • Tumblr has never been oriented yet toward making a profitable business model. They have not earned any money yet. How will they be able to change quickly their service in order to turn Yahoo's investment into a profitable action?
  • In overall, most of buyouts like this one, never really benefits the service for its customers. Orange for example is trying to sell Dailymotion, skype has been sold by Ebay not a long time after it acquired it, without making any improvements to the service. Sometimes the service even stop existing. So users most of the time are sacrified.
I also read another interesting article (I don't find the link back though), which was interesting: Yahoo, despite all, remains a profitable business, that has been able to adapt the different cycles of the web history. Yahoo has always been able to adapt itself to adapt its business model. Maybe Tumblr's acquisition is one of many moves that will secure Yahoo's future.

Nevertheless, what has just happened is symptomatic of what happens in a lot of cases with start ups in the Internet world: A lot of companies develop cool products that interest a massive amount of people fast, but with no business model, hoping a bigger company will buy it out before they need to prove any consistent ways to generate revenues. And I believe that this fact will end soon, as Internet companies start to get bigger and bigger.