Tumblr exec: Yahoo 'lived up to everything promised' in buyout deal

Tumblr exec: Yahoo 'lived up to everything promised' in buyout deal

Summary: Yahoo purchased Tumblr in a deal worth over $1 billion. According to Tumblr's founder, company changes have gone as well as can be expected -- and Yahoo remains firmly hands off in the firm's operations.

TOPICS: Tech Industry

Tumblr's founder and CEO David Karp has lifted the lid on the Tumblr-Yahoo buyout deal, saying that the new owner has "lived up to everything they promised."

Yahoo purchased the blogging platform for $1.1 billion last year. In a blog post announcing the deal, Yahoo CEO Marissa Meyer promised "not to screw it up," and that Tumblr's product roadmap and team would remain the same. Yahoo has made precious few changes to the system and has even shied away from placing the firm's logo on Tumblr's website; the one major change involving the removal of adult blogs from searches. However, after user backlash, this feature was quietly restored.

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In an interview with the New York Times, Karp told the publication that while Yahoo has remained hands-off since the acquisition, the tech giant has also kept its promise to make Tumblr better — by boosting the blogging platform with additional resources, advice, and funds.

Since the buyout, Tumblr's staff levels have more than doubled to 220 employees, and according to comScore figures, the platform's audience has jumped by 22 percent year-on-year.

Karp said:

The most terrifying thing to me was that this would change the company in any way. But almost a year in, they have lived up to everything they promised.

The two companies, however, are still working out how to generate not only audience growth, but also how to boost revenue levels without drowning bloggers in advertising. Users are unlikely to respond well to banner advertising, and so one idea in the pipeline is to appeal directly to businesses and make them create branded blogs where they can interact directly with users — in the same manner as Facebook pages.

This in itself will not make Tumblr money, but the concept could become the gateway which encourages companies to pay for premium placement on Tumblr products. However, this may be a hard sell as Tumblr only requires an email address to sign up — which takes away valuable demographics, age, and gender data used in targeted products and advertizing.

This issue keeps "the stakes as high as they’ve ever been," according to the Tumblr CEO. However, looking forward, Tumblr is yet to fully embrace the potential of mobile technology, and new products in the pipeline may be able to snag new users as well as provide a channel for additional revenue growth.

Topic: Tech Industry

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  • So...

    I understand Tumbr benefit, they get a $1B, more resources, etc... what has Yahoo investors gotten? I mean would Yahoo have gotten better returns if they just invested that money in the stock market top 1000?

    My daughters are on Tumbr like many young people and they are a fickle bunch and will jump ship quicker than people jumped off MySpace. I simply see little growth or channels or benefit for Yahoo in buying this.

    I have said it before, Mayer is WAYYYY over rated as a CEO. She is a female tech CEO which is rare and is photogenic but has shown nothing in her ability to run a company and has in fact had high profile screw ups like the CFO that she brought in walking out the door with $70M after 15 months. She setup a nursery next to her office with a nanny while demanding working mothers stop working from home and shove their own kids in daycare. She has spent billions with nothing to show for it.
    Rann Xeroxx