Yahoo (NASDAQ:YHOO) is taking a hands-off approach to its acquisition of Tumblr, a deal they hope not to screw up like their failed attempts to run photo-sharing site Flickr and web-hosting service Geocities.
Yahoo Chief Executive Officer Marissa Mayer believes that acquiring Tumblr will bring new energy to Yahoo. Mayer said that Tumblr, which was founded by 26-year-old high school dropout David Karp, will remain independently operated. Mayer assured Tumblr users “It’s not going to change. There are certainly going to be some things behind the scenes — be it search or discovery or pulling some of Tumblr’s content into Yahoo’s core properties — but in terms of the way that Tumblr works, it’s still going to be aligned with David’s vision and road map.”
Yahoo purchased Tumblr for $1.1 billion in a part of Mayer’s plan to make Yahoo more relevant to a younger audience by incorporating more social media, although she dismissed the idea that the purchase was made to “buy some cool.” The blogging site is popular with teens and young adults, who are drawn in by the fact that Tumblr has not yet been infiltrated by their parents the way Facebook (NASDAQ:FB) has. Tumblr has 300 million unique monthly visitors.
Mayer said that Tumblr represents the kind of “hypergrowth” that Yahoo would like to eventually achieve. She hopes that the acquisition will increase Yahoo’s audience by 50 percent, to one billion monthly users. “We bought a growth opportunity. We’ve been very clear that our goal is to grow, to grow with the market and eventually to grow faster than the market,” she said.
Karp is also optimistic about the partnership. Karp created the blogging site to serve the online creative community, and said of the deal, “This is an incredible opportunity to serve that mission for a long time. This is a long-term thing for me.”
While some Tumblr users took to social media to complain about the Yahoo deal, it looks like they don’t have much to worry about for now. Hopefully Mayer’s hands-off approach will prevent Tumblr from failing under Yahoo’s ownership.
Investing Insights: Is Marissa Mayer a Winner?