Mayer is cobbling together a new set of Yahoo properties via acquisition, but that won't change the perception of Yahoo with younger demographics.
Yahoo's problem is that they have no gorilla products. They have no big, dominant product/s, that generates billions in revenue, and is still growing at double digits. There's no core to what Yahoo is, so they're on a perpetual treadmill of buying other sites / services to replace dying sites (eg Tumblr for Geocities). So long as you're buying other sites to supply your core, you'll always be running behind (not to mention it requires incredible vision to buy the right sites / companies).
The history of the Web says that the dominant players all have gorilla core products that provide moats.
Go to Yahoo.com and tell me what you see... it's still a boring portal from 1999. They're not the leader in search. They're not the leader in social. They're not the leader in mobile. They're not the leader in cloud services (eg AWS / Azure / App Engine etc). They're not the leader in image hosting / sharing or streaming video or music. They're not the leader in email. They're not the leader in web gaming / social gaming.
So Mayer is going to buy Tumblr, which will chase off their most loyal users. Then Yahoo is going to have to figure out how to pay for the billion dollar acquisition, which will chase off even more users. And in the end, the best value they can ever derive from Tumblr will be portal style integration with yahoo properties, which is something they could have gotten in a simple deal.
A lot of people are looking at Flickr as a reference point to this deal. Yahoo paid $35 million for Flickr, and it had a functional business model that is still alive today.
Yahoo doesn't necessarily have to bolt onto Tumblr onto a dying core, one option would be to milk yahoo.com (and leverage whatever synergies exist) to invest in Tumblr as a new and seperate replacement core.
Maybe not likely, and maybe not enough "there there" to build an appropriate sized business around.
We share the same reasoning. What Yahoo lacks is a core. It was never given the chance to develop one, because all management teams have focused on buying products. And it's a pity, because Yahoo has the resources to battle Gooe in search and advertising. I don't fear Google, Bing, ddg or blekko in search. I fear Yahoo and Amazon. Both have. Real chance to take down Google, but are too busy making money(amazon) or wasting it (yahoo).
Yahoo's problem is that they have no gorilla products. They have no big, dominant product/s, that generates billions in revenue, and is still growing at double digits. There's no core to what Yahoo is, so they're on a perpetual treadmill of buying other sites / services to replace dying sites (eg Tumblr for Geocities). So long as you're buying other sites to supply your core, you'll always be running behind (not to mention it requires incredible vision to buy the right sites / companies).
The history of the Web says that the dominant players all have gorilla core products that provide moats.
Go to Yahoo.com and tell me what you see... it's still a boring portal from 1999. They're not the leader in search. They're not the leader in social. They're not the leader in mobile. They're not the leader in cloud services (eg AWS / Azure / App Engine etc). They're not the leader in image hosting / sharing or streaming video or music. They're not the leader in email. They're not the leader in web gaming / social gaming.
So Mayer is going to buy Tumblr, which will chase off their most loyal users. Then Yahoo is going to have to figure out how to pay for the billion dollar acquisition, which will chase off even more users. And in the end, the best value they can ever derive from Tumblr will be portal style integration with yahoo properties, which is something they could have gotten in a simple deal.
A lot of people are looking at Flickr as a reference point to this deal. Yahoo paid $35 million for Flickr, and it had a functional business model that is still alive today.
This is a bad joke on Yahoo shareholders.