May 20, 2013
Will Yahoo’s $1.1 billion acquisition of Tumblr help the social-media site solve one of its biggest problems, drawing major advertisers?
The deal announced today could help Yahoo attract so-called “millennials” — those coveted Internet users born between the early 1980s and the early 2000s — and Tumblr might benefit from Yahoo’s relationships with ad agencies and marketers, AdAge.com reports. On the other hand, the purchase could damage Tumblr’s credibility with its core audience.
“Any time you go from the startup world to established companies with good infrastructure around technology and data, there’s an opportunity to move forward in helping brands understand what they’re getting from you,” AdAge.com quotes Chris Copeland, CEO of the agency Group M Next, as saying.
Still, there have been some notorious flops when big companies have gobbled up tech darlings, such as Yahoo’s 2005 acquisition of Flickr, which eventually resulted in the photo-sharing site falling off the map after years of mismanagement.
Ian Schafer, CEO of Deep Focus, an agency that is one of Tumblr’s preferred partners, said that rather than being a standard advertising vehicle, the site could be a marketing solution for brands that are savvy about publishing content. — Greg Beaubien