There seems to be a massive anti-Yahoo struggle going on in HN at the moment but I feel we need to look at this impartially. For better or for worse, the fate of the company is tied directly to the actions of Marissa Mayer now, this is no longer 1999 and Yahoo is no longer the same company.
They have this image (which they rightly deserve) of being a big, bumbling ancient Behemoth of a company which provides no real use or purpose to the internet, but this could well be part of a bigger revitalization.
Cutting off the fat of the company, bringing in new properties with the intention of keeping them alive, changing the company dynamics to make it a better place to work, bringing in more talent and having a much more youthful outlook on things... These are all good things.
It remains to be seen whether or not Yahoo can perform this transition but things look good for them, if they stick to their guns and simply improve Tumblr without lowering its value to the community, I can see a real future for Yahoo, one where it isn't just irrelevant, but where it makes it's own products and creates new and exciting applications.
What I really want to see, is whether Yahoo is capable of making the move to generation XI and what it brings to the table now it's finally left the time warp it was stuck in.
These are good points, but I don't think it's possible to not see Yahoo as a behemoth. It's a big company, with lots of executives and fiefdoms. Just because there's a new CEO doesn't mean the kind of change that needs to happen will happen (and conversely, it's wrong to lay all the blame at Meyer's feet if things don't turn out well).
The fact that Yahoo can lay down $1.1 billion in cash is a show of how big the company is. That is both an asset and a liability, when it comes to the existing corporate power struggle.
edit: I'll give an example of which I'm familiar with, as a user: Flickr. I joined Flickr after Yahoo acquired it and have been a happy, paying user for nearly 4 years. However, I'd be at a loss to count all the new drastic feature additions that have come in all that time:
1. A new mobile app (which I don't use)
2. a nicer horizontal-masonry-like gallery layout...which, flabbergastingly, only applies to some collections of photos and not others
3. HTML5 uploader
And yet still, I count myself as a happy Flickr user, which means that prior to Yahoo's acquisition, Flickr was a great service to begin with. From what I can tell, as a data-minded person, Yahoo has done very little with all the interesting data that comes in these voluntarily organized and submitted photos. I don't get much help with auto-tagging or auto-grouping of collections. The Flickr logged-in homepage is nothing but a short list of the last few people who "favorited" a photo...there's been almost nothing done in four years to get me to engage more with the Flickr network.
And Flickr's domain covers items of a very discrete nature...easier to do interesting analysis and data-operations on than I feel one could do with Tumblr.
So while Flickr's relative stagnation is not Meyer's fault...the fact that we can say, "Well, it's not her fault that Flickr is meh five years in a row" goes to show you how massive a company Yahoo is and how hard it is for everything to move/change even when a new CEO comes in.
> Case in point, look at how badly JCPenney fared after Apple retail exec, Ron Johnson, became CEO for just 17 months
Not that I'm disagreeing with anything you're saying, but I would like to point out that the changes Johnson implemented are now widely seen as terrible mistakes on his part, alienating huge swaths of the existing customer base. The problem wasn't that "fiefdoms" got in the way of reform, it's that the reforms were actually just poor choices.
Conversely, you could argue that Apple was similarly a huge dying behemoth when Jobs took the reins.
A CEO can make a huge difference on the upside and the downside (and of course they can also make no difference at all).
Right, but it's hard to tell what are just inherently bad decisions and what are bad decisions given the context and company culture. Some of Johnson's bad decisions were because they didn't gel with JCPenney's culture...however, to my point, it's possible that Johnson's choices could've worked great if the JCPenney's culture were more flexible.
Yes, it's the CEO's job to make decisions based on what she has at hand and what she knows of the ship she's steering. But I think this underscores the point that the nature of the ship is as important to the CEO's initaitives as the quality of the initiatives themselves.
So to say, "let's ignore that Yahoo (in the opinion of some) has been a creaky, slow-moving ship for the last 10 years and see it as an entirely new ship now that it has a new CEO" simplifies the situation a little too much.
The current business trend is to disrupt and unroot established stuff in large organizations. It's always a high-risk, high-reward endeavor.
The Ron Johnson story is interesting, as he was so successful at Target and Apple. There was definitely alot of ego and refusal to adjust to the signals the market was giving JCP. But the store within a store concept and lack of clutter is a big deal and will ultimately serve the company well.
> if they stick to their guns and simply improve Tumblr without lowering its value to the community, I can see a real future for Yahoo, one where it isn't just irrelevant, but where it makes it's own products and creates new and exciting applications.
I fail to see the connection between the acquisition of Tumblr and your vision of Yahoo suddenly becoming able to create new and exciting applications on its own as a consequence.
According to Wikipedia, Yahoo's main source of revenue is search and display advertising (by far). By purchasing web sites without any business model and trying to monetise their traffic, they remove value from these sites (for the user) and add nothing that these sites couldn't have done by themselves, in exchange for huge amounts of cash that could instead be spent on developing those "new and exciting applications".
They might get some value out of the talent they are acquiring with Tumblr on the long run, but I doubt that it'll be worth that much.
The connection is that success tends to beget success, Tumblr will give them a great platform to build their own cool applications on top of.
Honestly, I don't believe this is a 'Buy Tumblr and stick an advert in every <div>' deal, it just doesn't make sense, they know from experience it will destroy the ecosystem of Tumblr. It would make so much more sense to integrate Tumblr with their own products and build on top of it.
Success absolutely does not tend to beget success. There are radically more examples of success not begetting success, than the other way around (and that always has to be true numerically). There's nothing about past success that favors future success, and I'd argue it's the opposite: success today makes it even harder to maintain it tomorrow, as the market will assault your profit centers relentlessly with competition.
Just ask AOL.
Or ask Yahoo.
Or talk to HP about Compaq. Or ask Gateway how their success beget success.
Or talk to HTC about how their early Android success beget even more success.
Or ask Borders and Blockbuster.
Or AltaVista and Lycos and Excite.
Or travel back in time to 1992, and ask IBM how all their success delivered them a massive wave of red ink.
Or Netscape.
Or ask Sun what happened to their incredible sales momentum circa 1999.
A portion of the recent disdain / negativity seems to come from the recent cull of work from home employees and statements regarding the value of working from an office to Yahoo, there was quite a bit of anger directed at Mayer for that.
HN has had an anti=Yahoo bias for a long time; the reasoning behind the bias keep changing ("layoffs", "delicious", "WFH", etc.), but it always seems to be there.
I wouldn't rule out individuals with individual axes to grind, but most of the anti-yahoo sentiment is based on: their track records of no interesting products, acquiring and then squandering interesting products, and management decisions that run counter to HN's preferred "attract and retain top tier talent" approaches.
If Google continues its current growth trajectory and Yahoo! sticks around, I wonder how long it will be before people start rooting for Yahoo! as the "underdog".
Err, that happened quite a while ago. I think people were rooting for Yahoo just before their (failed) Panama Adsense competitor was released. (I say "failed" in the sense that while it kind of worked, it didn't match AdSense's results)
Your comment doesn't make it clear if you realize just how much bigger Google is than Yahoo. Google is worth $300B, Yahoo around $30B.
I think most, if not all, of those heaping scorn on Yahoo! would definitely like to see Yahoo! succeed and provide some viable competition to Google and Facebook.
Generalisations are dangerous, but I think the people on HN generally aren't Yahoo fans because traditionally they don't appear to value good engineering.
PG summarised it quite well:
But Yahoo also had another problem that made it hard to change directions. They'd been thrown off balance from the start by their ambivalence about being a technology company....The worst consequence of trying to be a media company was that they didn't take programming seriously enough....Yahoo treated programming as a commodity....One obvious result of this practice was that when Yahoo built things, they often weren't very good. But that wasn't the worst problem. The worst problem was that they hired bad programmers.
I think the majority of the anti-Yahoo bias is simply from the company still being alive, despite not having done anything right the last decade. A functioning market needs companies to fail quickly.
I use a yahoo.com email address (created mid 90s) to subscribe to mailing lists etc. But I check it thru Thunderbird or K-9 email clients. I just visited the Yahoo website after several years and it looks like it could have been designed in '99. You'd think with a billion dollars to spare they could hire a couple of good designers who know their CSS. I guess Google's website has also looked the same for a long time but Yahoo.com hasn't the elegance or the sheer usefulness of Google.
Wow, I actually was just about to go check it out so I could say you were wrong, but I can't really disagree. The upper and left elements have some of the clean/flat trend, but the rest of the page is ridiculously busy.
I could see both sides of the argument and not wishing to drag the thread on to a tangential discussion I do believe that it is better for the company in the long run, though perhaps not best for some of the companies individual employees.
Marissa Mayer's actions since becoming CEO remind me a lot of Steve Jobs' after returning to Apple -
First, get rid of the stragglers and people who don't believe in your vision. MM did this by ending remote work at Yahoo, and Steve Jobs did it by gathering everyone up and telling anyone who wasn't on board to "get the hell out" [1]. This will get rid of all the unmotivated and/or pessimistic people who might hold the company back.
Next, focus heavily on rebranding and spend a crapload of cash to convince the public that your company is different now. Steve Jobs did this with his famous "Think Different" ads [2], and Marissa Mayer seems to be doing this by making big PR waves with big acquisitions of mobile-centric startups. Hopefully this will make your company "cool" again and make the "A players" actually want to work for you (again).
And then of course, build a bunch of awesome products and then TAKE OVER THE WORLD as Apple did. We'll see if Yahoo can do the same.
"Anyway, so Steve said 'You know what, we're going to build a great company. We're going to reinvent the world. And anybody who believes me, like let's get moving. If you don't believe that will happen then get the hell out."
The world needs yahoo. It's great for competition and a place for startups to exit, rather than companies like pinterest acquiring sites to shut them down.
Maybe this could have been Posterous had they won that battle with Tumblr. Posterous had the superior product early on, but for some reason it never caught on. I wonder how that works, who wins for what reasons. It does not seem to be for product or technology reasons as I think Posterous had Tumblr beat. It's almost luck and magic who picks up the right kind of early users that lead to success. Admittedly it did seem like a bit of an uphill struggle since Tumblr got started a little earlier? Maybe that's it. Tumblr and Posterous were a new kind of microblog platform a couple of years ago, now Tumblr is massive and Posterious is dead.
Another thing that seems interesting to me is that whenever someone exits into an acquisition it's like this space becomes open again for new startups. Someone should make a new microblogging platform that now disrups Tumblr/Yahoo. It's kind of like the dragon Ouroboros, eating its own tail, around here sometimes.
I think the HD DVD/ Bluray era hasn't seen porn on those formats for two reason: 1. it doesn't matter anymore because the Internet has infinite porn. 2. No one wants to see their porn in HD, as it makes the whole thing kinda grosser. A bit like how Cameron Diaz looks great in low def, but has a crater face in HD.
That's a strange and interesting theory. I can think of a few anecdotal places where this is the case, but I wonder if anyone has done a study of porn as a predictor of platform success/failure...
Edit: Just thinking about the business of porn, this is probably a decent heuristic for simplicity and cost effectiveness. Porn is usually very low budget (compared to other mass market media), with a very high volume of consumers. From my experience in non-profit oceanographic research, nothing focuses an engineering effort like trying to succeed on a shoestring budget (wow, I never thought that'd compare to working in the porn industry).
> but I wonder if anyone has done a study of porn as a predictor of platform success/failure...
For better or worse, FB could be a good example of "platform success" that partially relies on that. It's not porn per se, just beach/bikini photos of one's lady-friends, or his work-mates, or the wife's friends.
Apple as a whole is pretty anti-porn, and they dominated the profits (though not necessarily market share) in the smartphone/tablet market for a long time.
If you don't think that the feature of being able to browse porn video sites on an iphone or ipad had a huge push in making their success you're missing out.
I was responding to GP's sentence "I wonder if anyone has done a study of porn as a predictor of platform success/failure". Apple prohibits porn on their platforms, e.g. the App store is pretty conservative in what they allow.
Except HD-DVD. In that battle, it was the one who had a video game console backing the standard versus the one with porn but a console maker only paying lip service to the technology.
BluRay won in terms of it stuck around, while HD-DVD died off, but I don't think BR has overtaken DVD's the way DVD's overtook VHS. For the longer game (which is probably only another half-decade), I'd argue that streaming/OnDemand is the real winner. If that's the case, then porn helped shape the winner yet again.
The way I remember it, Sony refused to let the porn industry print bluray discs, and the HD-DVD backers just didn't care, but bluray started winning as soon as Sony relented.
Well, that, and teenagers posting stuff about their hobbies. Doesn't even need to be the cool kids anymore. If you can amass enough content from the nerds to get them networking with each other and then make some money off it, it works.
Of course, the issue with Tumblr is the make some money off it part, but Yahoo is from the '90s, so they know not to expect to make money off things.
That's right. For example, Betamax (technically superior) was not licensed to porn studios, while VHS was. See also, American Express would not enable "gentlemen's clubs," whereas MasterCard did, which is one of the ways MC broke into the market.
I had the exact opposite opinion about posterous. I thought it was mainly built on hype and was quite popular inside eco chambers like HN community. There was very little if any user fueled, word-of-mouth growth. Also had had very little traffic when you compare it to tumblr.
I think it can be both. I'm using Tumblr as a blogging platform than a social network. I spend more time writing content than looking the posts of other. I migrated from Blogger to Tumblr coz I feel that blogging is easier there.
I have 12 blogs on Tumblr (and counting), almost all of which I post to frequently - and the only thing I ever use the dashboard for is to make those posts. The only social action I have ever taken was to reblog a recent post I found on reddit, mostly just to see what would happen.
Disagree, Tumblr won because it of it's underlying attitude and commitment to creativity. Posterous never had that edge to it. I engaged with both platforms, and Tumblr, quite simply, felt cooler and fresher.
There's always a bit of luck involved in these things that escapes reason. I seem to recall that at some point the landing page of Posterous was considerably more cluttered than the LP of Tumblr, and that kinda gave me the impression Tumblr was the simpler product, but I never really used either of them.
As part of our research, we interviewed Alan L. Wurtzel, the Level 5 leader responsible for turning Circuit City from a ramshackle company on the edge of bankruptcy into one of America's most successful electronics retailers. In the 15 years after its transition date in 1982, Circuit City outperformed the market 18.5:1.
We asked Wurtzel to list the top five factors in his company's transformation, ranked by importance. His number one factor? Luck. "We were in a great industry, with the wind at our backs." But wait a minute, we retorted, Silo -- your comparison company -- was in the same industry, with the same wind, and bigger sails. The conversation went back and forth, with Wurtzel refusing to take much credit for the transition, preferring to attribute it largely to just being in the right place at the right time. Later, when we asked him to discuss the factors that would sustain a good-to-great transformation, he said, "The first thing that comes to mind is luck. I was lucky to find the right successor."
Luck. What an odd factor to talk about. Yet the Level 5 leaders we identified invoked it frequently. We asked an executive at steel company Nucor why it had such a remarkable track record of making good decisions. His response? "I guess we were just lucky." Joseph F. Cullman III, the Level 5 CEO of Philip Morris, flat out refused to take credit for his company's success, citing his good fortune to have great colleagues, successors, and predecessors. Even the book he wrote about his career -- which he penned at the urging of his colleagues and which he never intended to distribute widely outside the company -- had the unusual title I'm a Lucky Guy.
At first, we were puzzled by the Level 5 leaders' emphasis on good luck. After all, there is no evidence that the companies that had progressed from good to great were blessed with more good luck (or more bad luck, for that matter) than the comparison companies. But then we began to notice an interesting pattern in the executives at the comparison companies: they often blamed their situations on bad luck, bemoaning the difficulties of the environment they faced.
Compare Bethlehem Steel and Nucor, for example. Both steel companies operated with products that are hard to differentiate, and both faced a competitive challenge from cheap imported steel. Both companies paid significantly higher wages than most of their foreign competitors. And yet executives at the two companies held completely different views of the same environment.
Bethlehem Steel's CEO summed up the company's problems in 1983 by blaming the imports: "Our first, second, and third problems are imports." Meanwhile, Ken Iverson and his crew at Nucor saw the imports as a blessing: "Aren't we lucky; steel is heavy, and they have to ship it all the way across the ocean, giving us a huge advantage." Indeed, Iverson saw the first, second, and third problems facing the U.S. steel industry not in imports but in management. He even went so far as to speak out publicly against government protection against imports, telling a gathering of stunned steel executives in 1977 that the real problems facing the industry lay in the fact that management had failedto keep pace with technology.
The emphasis on luck turns out to be part of a broader pattern that we came to call the window and the mirror. Level 5 leaders, inherently humble, look out the window to apportion credit -- even undue credit -- to factors outside themselves. If they can't find a specific person or event to give credit to, they credit good luck. At the same time, they look in the mirror to assign responsibility, never citing bad luck or external factors when things go poorly. Conversely, the comparison executives frequently looked out the window for factors to blame but preened in the mirror to credit themselves when things went well.
The funny thing about the window-and-mirror concept is that it does not reflect reality. According to our research, the Level 5 leaders were responsible for their companies' transformations. But they would never admit that. We can't climb inside their heads and assess whether they deeply believed what they saw in the window and the mirror. But it doesn't really matter, because they acted as if they believed it, and they acted with such consistency that it produced exceptional results.
This is getting OT, but this paragraph in the article was particularly interesting:
> Computers have become a pinnacle part of everyday life, and research has shown that individuals may subconsciously treat interactions with computers as they would treat a social situation.[26] This finding combined with what is known about the self-serving bias in interpersonal relations indicates that consumers that use a computer to buy products will take personal credit for successful purchases but blame the computer for negative purchase experiences. It was also found, however, that consumers are more willing to attribute successful purchases to the computer and not ascribe blame to the computer for failed purchases if they have “intimate self-disclosure” with the computer, which Moon describes as revelation of personal information that makes the discloser feel vulnerable.[6] Another reason is that people are so used to bad functionality, counterintuitive features, bugs, and sudden crashes of most contemporary software applications that they tend not to complain about computer problems. Instead, they believe it is their personal responsibility to predict possible issues and to find solutions to computer problems. This unique phenomenon has been recently observed in several human-computer interaction investigations.
Yeah so much for Good to Great, companies that are supposed to be long-term winners and yet 2 years later Circuit City was already showing severe strain, and 7 years later it was completely bankrupt.
Of course, hindsight is 20/20 and there are without question issues with a number of companies on that list.
However, that does not change the manner in which the leadership of the companies viewed their contemporary success and how it came about.
I found it extremely interesting that such high-level leaders could swallow their pride and attribute success to good fortune. It is trivially simple to dismiss luck as a huge factor due to our own egos being in the way, and the fact that these people were so publicly adamant about their lucky streak suggests to me a level of humility rarely seen in that echelon of executive power.
Wurtzel stepped down as CEO in 1986. He was still on the board after that, but it was his successors that made the decisions that brought Circuit City down. (As a board member you could argue that he was accountable, but things like Divx and the commission/salary disaster were not his decision.)
I was going to suggest it could have been something as simple as a name. Posterous is a proposterous name. It's horrible. Tumblr is an equally shitty Web2.0 crap name, in the same vain as the ghastly i prefix. iYahoor!
I suspect Tumblr beat out Posterous because of its community features. By showing a feed of new posts, a la Twitter, it aided the discoverability of content. And there's nothing to spur on a community like the addiction of getting likes, notes, and reblogs from other people.
Does yahoo have a good track record of acquiring services and not frakking them up? Not a troll question, I stopped using yahoo in 1999 but for the occasional openid.
They kind of did screw up Flickr, just by virtue of letting it stagnate. They got lucky in that no one else really made anything better in the meantime.
I don't think Flickr and Facebook/Instragram really compete, except in the situation where people didn't need Flickr but Facebook/Instagram didn't exist yet. Flickr is more for professional photographers, not a social network for youths to share their photos with their group. If Flickr loses professional photogs, then they're hurting. But they haven't yet.
Instagram is not going to replace Flickr for Flickr's core audience.
Thats the entire point. Flickr is about photos. If Flickr was releasing new products and testing new things they might have landed on Flickstagram. But like OP said they didn't do much at all, and so missed the boat.
So yes you're right, they don't compete. But thats the problem. Hypothetical one, and I wouldn't blame the CEO for it. Its just one of the many things up the road they didn't travel up.
That being said...since MM took over, I'm seeing signs of life in Flickr. New mobile app, noticeable upgrades on the web interface, little things like that. I suspect Flickr is on her priority list.
If they'd managed flickr properly, there may have never been a YouTube or an Instagram. A competently-run flickr could've handled video (in a non-crippled fashion), and would've been anticipating and well-prepared for the mobile photography boom.
My guess is that flickr was being run by a bare-bones team in strictly maintenance mode, and the profits were funneled into other (money-losing) parts of the company.
I don't think its fair to compare Yahoo! under different CEO. They all had different goals and roadmap. The current Yahoo seems to be going towards another direction than its immediate predecessors.
Fair enough. But the big ships have a lot of inertia while turning and her efforts to change the corporate culture (something everyone says she is doing atm) will need time to give results. So she will have to use whatever teams and people she has available right now.
Not particularly. However, there is a lot of theorizing that Meyer could possibly be a fix to this issue. This acquisition is probably the first thing she'll be graded on.
Not really, but during the '00s Yahoo had a management culture where decisions were made by (painful, painful) consensus. Generally this led to stagnation in the acquired services, and when you're stagnant, you get lapped.
Meyer seems determined to change this, though. Impossible to tell how much headway she's made from the outside, but she's certainly saying the right things here. We shall all see in due time.
I don't work for Yahoo, but I must say I would seriously consider working there now with Marissa Mayer at the helm.
Mayer appears to be doing everything she can to drag Yahoo back to being relevant, and to me that sounds like an interesting (and potentially rewarding) challenge.
I just hope she is looking for innovation from within as well as from acquisitions.
A lot of people feel this way. I feel this way even after having worked at Google. Yahoo is going through an exciting transition and I'm confident it'll be competing with Google once more with Marissa Mayer at the top. Its not going to be quick or easy, this is about the long game.
This is a strange comment to me. Does buying a large corporation make you relevant? I didn't see people making the same comment after Google bought YouTube and Motorola, or when Facebook bought Instagram. Now those companies have been attractive places to work for a long time, arguably since they where founded. I don't believe that Yahoo has the attractive engineering culture that Facebook or Google has. I believe if they screw this acquisition up, it will be the nail in the coffin for yahoo. They will go the way of AOL. I think Mayer has the toughest job in Technology right now, I hope this is the move that will spark the turn around.
I don't work for Yahoo either, but I still wouldn't consider working there even with Marissa Mayer on board. It just has a better CEO but it's still a doomed company. I can't think of a single Yahoo! product that I sincerely believe in and would be excited to work on.
On the contrary i would seriously consider getting another job because i would feel like the management is totally broken.
Yahoo is not going to be relevant again because they bought Tumblr. They cant even make their own product relevant.
I cant even understand why anybody would buy Tumblr 1 billion or more.
Dailymotion would have been a good deal, this service is relevant and people are starting to be willing to pay to watch videos. They could have bought loads of usefull stuff for 1 billion.
To me it just feels like a publicity stunt to make the stock go higher for a few days , but what is the long term strategy ?
At that rate Mayer will be out in 1 year from now.
Well yahoo has things to offer to the tumblr team - a lot of technical and scalability know how. I won't be surprised if they are able to shave operating costs a lot and utilize better the labor force.
The problem is that the valuable asset of tumblr are its users. And users are fickle bunch.
Cutting costs is nice and all, but these are Internet companies. It's expected that an acquisition will bring about much more substantial synergies than they would for the merger of two ketchup companies.
> Per the agreement and our promise not to screw it up
That line is a winner. Hahaha. It's a good thing though that they recognize the general sentiment that they do tend to screw up the products they acquire.
Off the cusp, $1.1 billion seems like a staggering amount of money to pay for yet another content hub. My gut is screaming that this is sure to go down as a horrible waste of capital. Yahoo has much stronger footing in open source than many other companies. They still have a vague sense of coolness about them, and I feel they're pissing away a ton of money for no reason here. First they prevent employees from working at home, stomping out what could've blossomed into at the very least a novel and progressive work model. Now a billion for tumblr. What in the actual fuck are they thinking? What is the long term strategy here for Yahoo?
They'd get more out of their money by selecting 1,000 open source projects on GitHub at random, and investing $1M into each.
'Promises not to screw it up'. I think Yahoo are keenly aware people are expecting them to fail badly at this, and want to try head it off at the pass.
So Yahoo now has Mayer running the ship, and Karp involved ostensibly with Tumblr but I'd wager he'd have some input with the direction of Yahoo. He comes across as being a smart, focused guy in profiles, so he might have some bearing on where Yahoo is going.
I certainly enjoy them a lot more. I saw an ad for an inexpensive VPS service on Facebook a few days ago that I wouldn't have heard about otherwise. It's a lot better than random Vistaprint ads.
I use services like Yelp, Netflix, and Amazon to give me targeted recommendations all the time. If ads could somehow read my mind and bring up good recommendations on my browser's sidebar that would actually be very valuable.
Usually I'd agree with you, but I could see that being true for Tumblr. When I was using Tumblr actively, more than half of the content I followed was some expansive form of advertising, e.g. http://magnumfoundation.tumblr.com/
It seems to me they tried to buy a young and hip userbase. MySpace was once young and hip. It was where all the bands were. Tumblr is young, but not hip in any way. It's full of strange and not particular "social" (as in communicating and influencing the mainstream alot) people. Tumblr is full of (besides pron) homestuck fandom and feminists. It's full of some subcultures that are ridiculed by the mainstream (like MLP fans) and passive aggressive tweens. I'm not sure if Yahoo wanted that.
Yeah, seriously. My first reaction was, "Wait, you wanted this userbase?"
Yahoo is so unhip that they don't even realize what they've gotten themselves into, probably.
I'm sure some sane people have blogs on tumblr, but they're vastly outnumbered by the "social justice" retards who think that screaming about how all straight white men should be auschwitzed for their sins is some sort of legitimate activism. (Where sins = having been born.)
A lot of the tumblr community's response to the acquisition has been downright hilarious, naturally. They're pretty offended that someone bought "their" blogs without their permission. Any explanation of how the world works is, of course, met with accusations of "privilege" and shouting about how the poster/yahoo/etc is trying to "oppress" their precious PEE-OH-CEES.
I always believe that Marco is already a millionaire with his blog and Instapaper earnings. But I'm curious how much of Tumblr he and David still owns.
I am genuinely confused about something because my realization does not coincide with my previous held beliefs. So I would appreciate if someone else could validate or make a good argument for why I am wrong.
These companies, especially the biggest ones and the ones that are acquired by them; they all seem to have one thing in common. They are all not at all about what they built, but, once you control for the variables, what you are left with is that it all comes down to users. These acquisitions have zero interest in the "product" as it is rarely unique or even innovative (image filters, "micro"-blogging, task management, etc.); it is all about acquiring the users.
Is there anything that could point to these and most other acquisitions not being solely about the users. I find it hard to believe that Google, Facebook, Microsoft, Yahoo, etc couldn't build what are, essentially, usually, rather simple technologies.
It seems like it all comes down to the human factor and that changing versus creating new habits is rather difficult and costly, i.e., more than $1 billion dollars costly.
Sorry for the redundancy. I had to throw it together while being interrupted with work. Damn work.
I think you're spot on. Cloning the technologies is relatively easy. But getting attention is a hard problem.
As a general rule, companies rarely[0] win because of superior technology. Rather, they win because they use their tech in a way that provides superior value to their users.
This is something all aspiring entrepreneurs should keep in mind. Nobody cares if your company uses incredibly elegant code or highly sophisticated Machine Learning/NLP/Functional Programming/whatever. All users care about is whether your product provides value. And remember that "value" is highly subjective-you may not think that Facebook is useful, but many people will disagree with you.
[0]: there are certainly exceptions. If you know that the problem you're solving has major market demand, then you can win with superior execution. Viaweb is a good example, as pg tells it they won mostly because they could roll out features much faster than their competitors.
Users by themselves aren't valuable but the ability to monetize them is. Whether it's by selling them products or by showing them advertisements. The bigger companies have better infrastructure in place to be able to monetize users and I think Yahoo just thinks they'll be able to monetize the Tumblr users and recoup their investment that way.
It helps that the Tumblr demographic is most likely different from Yahoo's - although that may hurt them when trying to monetize since a different approach may be required. We'll see what happens.
Don't get it why people are bitchin' about this so much. From what i understand Tumblr was running out of money so there was no other way out for them and their users.
So we have option:
a) cry about it online all day, make petitions ... and the whole system closes in a couple of months and you end up with nothing
OR
b) yahoo buys it and the site lives on
It's terrific that Tumblr and its investors get to make a lot of money.
I just don't understand all this talk about Tumblr remaining independent of Yahoo. Yahoo is mostly a pretty stagnant company that needs new ideas and ways of thinking and doing business. Tumblr offers that opportunity - making the central point of interaction a user-defined dashboard rather than an overly-programmed portal that fewer and fewer people visit out of inertia.
Sure, let Tumblr be Tumblr so you don't scare off its audience. But unless Yahoo itself becomes more like Tumblr, what's the use of spending $1.1 billion?
If it was an acquhire they paid 5.8 million for each employee (187 employees). If it was to capture their revenue stream, they paid 85 dollars for every one dollar of revenue generated last year (13 million).
The largest concerns seem to center around: Yahoo attempting to make Tumblr family-friendly, re-branding Tumblr into a Yahoo property, and where David Karp is going to be (now and in the future).
I think it almost certainly has to be David Karp. This should be an insane and guaranteed payday for him.
Marco Arment hasn't had anything to do with Tumblr in years. He might hold some equity as a result of his time there, especially since he was there at the very beginning, but certainly not more equity than Karp.
Mayer/Yahoo has a long way to go to prove that this was a smart idea. Two years from now they might be the biggest winners, but they're also taking on all the risk at this point.
And as for the investors, this should be a big win for them (although I don't know how much they invested, so hard to say how big of a win), but they are investment firms who have to spread the profits around, opposed to Karp, who is one guy who just got a huge check.
If there is any interest, I'm trying to start a meta discussion on successful acquisitions. I'm genuinely interested in examples, as I can think of none: https://news.ycombinator.com/item?id=5738288. All the ones I've been part of (five now), have been total crap.
Youtube. Android. Applied Semantics. That L.A. co that became Adsense or Adwords. Google Maps, I believe. Writely (Google Word). That Israeli co that became Google Sheets. Somewhat Blogger and many more just for Google.
I hope this isn't a silly question... Reports say that tumblr is running low on cash and could only afford to operate for the next few months. This deal is going to take a few months (article says next quarter) to close. Is it not possible that they would run out of money before the deal officially closes?
Indeed. This seems to be the motivation behind the sale. I'm sure David Karp would have liked to keep tumblr independent, despite the huge payday, but it seems to me that he failed to develop a cohesive business model.
I loved the focus he put on the market sector he was serving, and I share his hatred of intrusive advertising, but he didn't present a realistic alternative. It's a shame - we keep losing innovative businesses that don't think enough about long-term business models, so we have to hop onto the next big thing until it too gets snapped up. Much as I dislike Facebook, you have to respect Zuckerberg for not selling out... at least he's tried to build something sustainable.
"Now it's probably worth several times that..." to Facebook.
Facebook acquired Instagram because they were worried about the rapid growth of a photo sharing app that didn't involve Facebook. The Instagram purchase was a very expensive insurance policy.
Will Yahoo smother Tumblr with integration projects like single sign-in, leaving insufficient resources to do anything new? Or will it be benign neglect? Or will they actually invest in it as a social platform (instead of as a database like they did with Flickr)?
I like how reactionary that is, much like when people expected Instagram to suddenly gain pokes and sidebar ads when Facebook bought them. It may as well say 'WE DON'T LIKE CHANGE'.
Kinda reminds me when Kraft was about to acquire Cadbury there were thousands (Ok not literally but there was quite a bit of noise) of facebook groups saying that this shouldn't happen because "the chocolate will taste like dairylea cheese" as if Toblerone wasn't a thing that Kraft made.
It's funny how when there's news of a company acquiring another people think straight away that it'll change drastically and overnight, making the huge assumption that the company is A) going to change anything B) doesn't know that changing something will break trust with users making their billion dollar purchase useless.
Or maybe Yahoo will change things on tumblr who knows? I'd like Yahoo to add a feature to change your primary blog on tumblr. That would be nice to have..
> It looks that lot of their users don't like that idea:
To be more precise, they don't like this:
"Stop Yahoo! from buying Tumblr!! If this happens, the entire interface will be changed, and millions of users will delete their accounts - me being one of them. Please, please, please sign this to stop this!!"
... which isn't the same as Yahoo buying Tumblr. They don't want Yahoo to negatively change Tumblr (there's a difference).
They have this image (which they rightly deserve) of being a big, bumbling ancient Behemoth of a company which provides no real use or purpose to the internet, but this could well be part of a bigger revitalization.
Cutting off the fat of the company, bringing in new properties with the intention of keeping them alive, changing the company dynamics to make it a better place to work, bringing in more talent and having a much more youthful outlook on things... These are all good things.
It remains to be seen whether or not Yahoo can perform this transition but things look good for them, if they stick to their guns and simply improve Tumblr without lowering its value to the community, I can see a real future for Yahoo, one where it isn't just irrelevant, but where it makes it's own products and creates new and exciting applications.
What I really want to see, is whether Yahoo is capable of making the move to generation XI and what it brings to the table now it's finally left the time warp it was stuck in.