Tumblr Tumbles, Marking yet Another Poor Investment Decision by Yahoo
April 14, 2016
The article on VentureBeat titled As Tumblr’s Value Head to Zero, a Look at Where It Ranks Among Yahoo’s 5 Worst Acquisition Deals pokes fun at Yahoo’s tendency to spend huge amounts of cash for companies only to watch them immediately fizzle. In the number one slot is Broadcast.com. Remember that? Me neither. But apparently Yahoo doled out almost $6B in 1999 to wade into the online content streaming game only to shut the company down after a few years. And thusly, we have Mark Cuban. Thanks Yahoo. The article goes on with the ranking,
“2. GeoCities: Yahoo paid $3.6 billion for this dandy that let people who knew nothing about the Web make web pages. Fortunately, this was also mostly shut down, and nearly all of its content vanished, saving most of us from a lot GIF-induced embarrassment. 3. Overture: Yahoo paid $1.63 billion in 2003 for this search engine firm after belatedly realizing that some upstart called Google was eating its lunch. Spoiler alert: Google won.”
The article suggests that Tumblr would slide into fourth place given the $1.1B price tag and two year crash and burn. It also capitulates that there are other ways of measuring this list, such as: levels of hard to watch. By that metric, cheaper deals with more obvious mismanagement like the social sites Flickr or Delicious might take the cake.
Chelsea Kerwin, April 14, 2016