I love the Tumblr acquisition. Yes, I know the company only has $13 million in revenue today, but that is not the point. From Facebook to Pinterest, the first area where these folks need improvement is customer experience.
You can make the site great, get users in the habit of turning to you and then worry about boosting revenue later. Who can forget the scene in The Social Network, when Zuckerberg’s former partner Eduardo Saverin insisted on generating revenuesthrough advertising and Zuckerberg adamantly refused? He said it was way too early. Guess we know who was proven right. Facebook’s acquisition of Instagram and Google’s acquisition of YouTube were similar in concept and both have proven to be brilliant deals. Once you get action, there are plenty of ways for smart folks to figure out how to monetize their site.
Now all Yahoo has to do is execute. While Tumblr’s management team will remain intact, you have to hope that they can perform just as well under new ownership as they would have had they stayed independent. Most importantly, a deal like this one energizes the entire Yahoo nation. It is an expensive way to move a company forward, but I can’t think of a company that needs it more than Yahoo. Marissa has guts and vision. Wish I had bought the stock sooner.