Just last week Yahoo snapped up the 6-year-old, 100 million user platform Tumblr for just over $1 billion. This was not overly surprising, considering the fact that one of Yahoo’s biggest needs is some kind of social networking component, which they have failed to create naturally in the past. What makes this purchase particularly interesting is the age demographic of Tumblr, which is very young according to Quantcast; 21% under 18, 30% 18 to 24, and 22% 25 to 34.
This demographic could be a huge boost to Yahoo because of their stodgy image to many young consumers who do not remember Yahoo as an early innovator. The flip side of that upside is that they Yahoo may alienate some of the users because of the perceived image of the company taking over many people’s favorite social platform who are afraid it will be altered for the worse (particularly with ads). While it does not look like much will change in the short term, as Tumblr CEO David Karp said they will be operate as a separate business so as, “not to screw it up.”
This was a large move for Yahoo, but it appears they aren’t done shopping yet, as they have been rumored to have bid between $600 and $800 million on the popular video-streaming service Hulu as well. An integration of Hulu and Tumblr as a commenting and sharing platform attached to Hulu could boost viewers and subscriptions on the heavily advertising reliant video service. Or, it could just be Yahoo spreading its net as wide as possible for the future.
In the midst of all the bidding, Yahoo also found time to re-launch Flickr, with a very snazzy new Web and mobile interface, as well as some fairly drastic changes to its model (especially for Pro users). But, what they thought would appeal to new users, mainly its design that closely resembles that of Instagram and Pinterest, also is annoying its existing core users. This change could create revitalization, or a complete collapse of the platform.
Yahoo’s CEO Marissa Mayer appears to not believe Yahoo can build its way into social, and instead wants to buy its way in. SiliconAngle is reporting that Yahoo is rumored to be bidding on two more companies (both between $150 and $200 million) in the social and mobile space.
Can Yahoo force its way in with a cash infusion, or will they ruin hot sites like Tumblr in their quest to become a social networking giant?