When the name Yahoo pops up I have to do a double take, because I always forget it still exists. Every time someone emails me from a @yahoo.com account or there’s some talk of the company doing something, business like, I’m reminded that it’s still around and not only that, but it’s worth billions and makes a killing every year. Well today I had that same realisation again, as apparently Yahoo is sniffing out Tumblr for a potential buyout.
The figures are big too, as the rumoured acquisition talks have apparently been whispering that it’s over a billion dollars, which puts it in the region of £660 million.
However, as Venturebeat suggests, the problem with such a lofty valuation, is that Tumblr, despite having a large userbase, doesn’t really make much money. Last year it pulled in only $13 million; though admittedly it did only begin an advertising campaign last year, so that figure is expected to rise throughout 2013.
From Yahoo’s end, another buyout isn’t too surprising, since the relatively new CEO, Marissa Mayer, has been buying up companies left and right since she joined in June last year. Granted none of the acquisitions have been to quite the same scale as Tumblr, but they’re noteworthy. What’s interesting though is Yahoo isn’t continuing with much of the services it’s buying up, suggesting that it’s either taking out startup competition, or working on a nice patent catalogue, so it can take other tech firms to task with patent suits.
With Tumblr however, it seems unlikely that Yahoo would splash out such a wad of cash, only to shut the site down. However, Yahoo could bring its own advertising network to bear, which could see it fall from grace with the user base, even if revenue would no doubt skyrocket.
KitGuru Says: Any Tumblr fans reading? Would you be annoyed if Yahoo took over the site?