Never thought of getting time out for writing on Monday night but the news hit so hard that it excited my writing genes, so here I am with my review of the recent Cash Buy. It is said about the human race that it’s a jungle out there. ‘Survival of the fittest’ said, Herbert Spencer after reading Charles Darwin’s On the Origin of Species – in his Principles of Biology (1864). Little did they must have known that the same will be true one day in 2013 for internet companies? The best part of acquisitions is that both the buyer and the ‘offerer’ are in a win-win position. Well at least in case of financials involved and strategy. So what’s the big deal in Yahoo acquiring Tumblr?
In the corridors of Mountain view and in California there is a trend that is evident. This 20 something young computer coders and street smart techis walk a path of proven success for social networking sites that they launch. Create a startup with proprietary platform (either yours or supposed to be yours). Get users glued to the site. Make them feel it’s their daily fuel with which you cannot do with (like many feel about facebook today). Keep users excited with new apps and sharing your platform for apps to be synchronized just for your site. Then one fine day get a tag on your head after getting lured by the internet whales (yahoo is old but still huge and ready for kill) and sell the company off. Now the whale is happy to get such huge and active user base on which they can develop a strategy to earn more bucks. Same happened in July of 2002 when the online mega store eBay acquired online payment company paypal for $1.5 billion. Internet search giant Google acquired video god Youtube in October 2006 for $1.65 billion all stock transaction. Last year in April of 2002 social networking giant Facebook paid cash and stock initially valued at about $1 billion to buy revenue-free Instagram, a popular photo-sharing service.
Yahoo one of the oldest internet companies was lacking its share in the space of social networking. So what do you do when you have money in your pocket but not able to stay young and in limelight all time. You buy what money buys best – solutions maybe a surgery many be a medication. Well in Yahoo’s case the acquisition of Tumblr will add to their social networking space big time only if they avoid the bombarding of advertisement. Tumblr is a microblogging platform and social networking website, owned and operated by Tumblr, Inc. The service allows users to post multimedia and other content to a short-form blog. Users can follow other users’ blogs, as well as make their blogs private. Much of the website’s features are accessed from the “dashboard” interface, where the option to post content and posts of followed blogs appear. As of May 19, 2013, Tumblr hosts over 108.2 million blogs and more than 50.8 billion posts in total. In April 2013 the website received more than 13 billion global page views. As of May 2013, 75.8 million posts were created on the site each day and over 300million unique visitors per month and 120,000 sign ups per day. Users of Tumblr looked at it as just another room in their house where they can sit and share. Focus activity personalized space, that’s what Tumblr is all about.
Yahoo’s CEO Marissa Mayer said, “I am delighted to announce that we’ve reached an agreement to acquire Tumblr. We promise not to screw it up”. Well that says a lot about what they know that we fear. Hope Tumblr CEO the 26 year old David Karp though will continue to be the CEO, will have the freedom to use his hat. Little had he known at 15 when he dropped out of high school and just five years before when he started Tumblr in his mothers New York apartment that his creation will be bought at $1.1 billion. Long live the David and Marks and Larry’s of the internet era. But I am beginning to think who is next in line? What are your thoughts on this article? Do comment and share this if you like it. After all because we all shared we made all these social networking sites a huge success.