The Yahoo/Tumblr deal explained

The Yahoo/Tumblr deal explained
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Businesses and teens both learned new words this weekend; ‘Tumblr’ and ‘Yahoo’ respectively.

Tumblr, the upstart social microblog platform with over 100 million hosted blogs was introduced to businesses world wide when news broke the company would be acquired by Yahoo in a $1.1 billion cash deal.

Tumblr is well-known for its young-skewing demographic, an audience Yahoo need to reach to regain relevance, though they’re also an audience who until this weekend had largely no idea that Yahoo existed or what it did.

Now the deal is done, nerves have somewhat settled and everyone has been introduced, let’s look at why this is a good deal for all involved:

1. It’s good for Tumblr

Tumblr’s server architecture has always been a concern. Such is the huge traffic demand on Tumblr’s servers, the site had a reputation for going dark. Though this hasn’t been as much of an issue lately, there are still improvements to be made.

With 105 million blogs, Tumblr gets 80 million new pieces of content every day – amounting to over 50 billion posts in total since 2007. They get more page impressions than Wikipedia, more dwell time than Facebook or Twitter, and are one of the top 15 most visited sites in the US.

Now they will benefit from Yahoo’s server infrastructure, and can concentrate their efforts on the making the product even more awesome, rather than on propping up their servers.

2.  This is not your Father’s Yahoo

Yahoo is resurgent, with new CEO Marissa Mayer drawing a big line in the sand in her battle to reinvigorate the brand and compete with Google and Facebook.

Gone are the days of Yahoo signaling the end for acquired startups, with Tumblr the centre piece to Mayer’s first phase of Yahoo turnaround, the cream of the 20 startups she’s acquired in the past year.

Mayer also polished the Tumblr acquisition news with a roll out of a brand new shiny look for Flickr, the photo sharing service which has been consistently ignored by previous Yahoo regimes, and was long over due a lick of paint.

Both moves represent a clear demonstration of Yahoo’s intent and ability to compete.

3.  ‘We promise not to screw this up’

Not content to rely on a press release to do spread the news for her, Mayer announced the deal with a Tumblr post, showing good humour and platform-savvy by including a GIF (no doubt made for her by the fine folks at Tumblr). [http://yahoo.tumblr.com/post/50902111638/tumblr-yahoo]

Her statement read:

“We promise not to screw it up.  Tumblr is incredibly special and has a great thing going.  We will operate Tumblr independently.  David Karp will remain CEO.  The product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve.  Yahoo! will help Tumblr get even better, faster.”

What I hope Yahoo understand is that an investment in Tumblr is an investment in its users.

Not only do I run Tumblr accounts for clients with We Are Social, where we’re an A-grade agency partner, but I run several of my own projects there. I’ve bought into Tumblr in a massive way and invested time and money on my blogs.

A promise not to screw it up is a good statement of intent, but if the promise isn’t followed up and Yahoo makes fundamental changes to the feel, philosophy and purpose of Tumblr, then the users that make Tumblr the creative, vibrant platform it is will move on.

Which brings us nicely to my next point…

4. This is great news for users

With founder and figurehead David Karp remaining in place, and Yahoo committing to Tumblr’s roadmap, Tumblr users can breath a sigh of relief.

The platform is still the same Tumblr we know and love, with extra support for new features, better and bigger servers, and importantly won’t result in the dashboard being immediately flooded with cheap display advertising.

5. This is great news for brands

Tumblr is not Social 101. It requires time and investment and a real content strategy to bring it to life, but until now only brands with expansive budgets have been able to take advantage of Tumblr’s promoted content to really make campaigns fly.

The Yahoo deal should allow Tumblr to maintain their commitment to natural, sponsored content rather than turning off users with display ads, but at the same time make it easier for brands to access Tumblr promoted products.

Currently geo-location is the only targeting available, so expect Tumblr to use Yahoo’s know-how to build in more content targeting options and better search to help brands reach the users they want to talk to.

Dan Goodswen is strategist at We Are Social

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