If Marissa Mayer had thought that she would be celebrating her first anniversary as Yahoo! CEO, she might have been disappointed. Yahoo! results released on Tuesday show Yahoo Inc.’s earnings climbing to 46 percent, thanks to its investment in Chinese internet company Alibaba. But their revenue fell by 7 percent since last year , showing that all is not well.
This is a post by Anshul Srivastava. Anshul is a Passionate Techie (PT), a friend of STL and an IT Analyst based in Toronto, Canada. Apart from being a die hard BlackBerry fan, Anshul is also passionate about writing and photography.
“We won’t screw Tumblr Up”, Marissa Mayer, CEO, Yahoo.
Words said by Marissa Mayer while announcing the acquisition of six year old social sharing website Tumblr. Tumblr acquisition is a $ 1.1 billion bet by Marissa to revitalize the stagnant revenue of Yahoo.Yahoo is a pale shadow of it’s old days and languishes way behind it’s competitors Facebook and Google.
What is Tumblr ?
- Popular Content sharing website.
- Subscriber Base: 300 Million Visitors per month.
- Revenue : 12 Million Dollar’s in 2012.
- Net Worth : 800 Million dollar’s
What Is Yahoo ?
- Web Portal,Search Engine
- Subscriber Base: 700 Million Visitors per month.
- Revenue : 4.98 Billion Dollar’s in 2012.
- Net Worth : 20 Billion dollar’s
Tumblr is one of the most popular social sharing website, drawing young people who use the platform to share pictures and texts. It draws more than 300 million visitors per month and has more than 70 million daily posts. Though Yahoo is still one of the most popular websites, it’s revenue and user base has continuosly been shrinking. Yahoo plans to increase it’s user base by 50 % to more than 1 billion monthly visitors.
Another factor which probably prompted this acquisition is the young crowd base of Tumblr.Yahoo which was once the internet powerhouse , wants to divert this traffic to it’s services.This young traffic may bring in more traffic,user engagement and ultimately more advert based dollars. This deal is also a way for Yahoo to touch base with the young crowd which connects more with facebook.
Another reason for Yahoo to clinch this deal was the smartphone crowd.Yahoo! still doesn’t has big presence on smartphones. Most of the Tumblr crowd consist of smartphone users.With Mobile Ad market expanding rapidly, tumblr will help Yahoo piggyback to this big market.
Inspite of these potential benefits most of the analyst around the Globe are looking at this deal with skepticism. One of the major reasons being Yahoo’s previous record of messing things up be it geocities, hotjobs.com or flickr. But it looks like Marissa Mayer has learnt from company’s previous mistake that’s why she has promised not to screw up Tumblr.
Another reason which is worrying Analyst is the revenue generation by Tumblr. Tumblr’s revenue for 2012 was only $13 million.Hopefully Marissa Mayer had some strategy in her mind when she bought the company at premium of 200 million dollar’s.If reactions on Tumblr are anything to go by Marissa has to worry more about keeping Tumblr’s current subscription base intact then moving them over to Yahoo.
If Marissa Mayer has to make this deal a turning point in the history of Yahoo, maybe she should bring her Google experience into play and use it to turn Yahoo’s fortunes around.
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