Yahoo! + Tumblr

In light of the $1B Tumblr acquisition by Yahoo!, I'd rather not comment on whether it was a good move by Yahoo! or not. From what I've heard, Tumblr was not making much money and was coming close to its fume date. Also, I've heard that growth of the platform was slowing.

That said, they could not have been in such difficult straights if they were able to negotiate a $1.1B all cash exit.

Acquisitions are hard. Turning popular (dare I say it, faddish) consumer platforms into real businesses is hard, and I wish everyone the best of luck.

I think it is worth looking at something Mark Suster wrote a few days ago which jives with my experience, and that is the downside of acquisitions for the existing team:

For the past 5 years or so Google, Facebook and a handful of tech industry giants have been quietly buying scores of early-stage startups for their talent. And to keep up with the Jones’s it seems that Yahoo! has now employed the same strategy.

And who cares, right?

How about if we look at it from the “rest of company” perspective.

You have been at Google, Salesforce.com, Yahoo! for years. You have worked faithfully. Evenings. Weekends. Year in, year out. You have shipped to hard deadlines. You’ve done the death-march projects. In the trenches. You got the t-shirt. And maybe got called out for valor at a big company gathering. They gave you an extra 2 days of vacation for your hard work.

And that prick sitting in the desk next to you who joined only last week now has $1 million because he built some fancy newsreader that got a lot of press but is going to be shut down anyways.

What kind of message does that send to the party faithful who slave away loyally to hit targets for BigCo?

The Tumblr faithful are in arms about the purchase, they are worried that Yahoo! will change Tumblr, and it will (it must) because while the service seems to be generating plenty of value, it is not capturing enough of what it has created, and it isn't creating enough new value any more to get a pass.

I will also add, that just when something seems like it cannot be made any simpler, it can (and does). Anyone else remember the early days of Dave Winer's blogging software, or Joel Spolsky's downloadable blogging solution? Then came Blogger, and it was simpler and better. Then Twitter. Then Tumblr. Twitter is technically simpler than Tumblr, but Tumblr is cognitively easier to get your head around.