Yahoo’s 1 Billion Dollar Deal

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

yahooOver the past years Yahoo has struggled to gain their users and be in the same league as Google and other sites. Now, there chance may have come to do just that.

It appears that there has been some serious talk of Yahoo buying the blogging service known as Tumblr. Supposedly, Yahoo has 1 billion dollars in hand and is currently looking into the purchase of Tumblr. Although this is a seemingly great for both of them, this deal could go either way. It could be the kick start that Yahoo needs or could just be another failed attempt by Yahoo that brings Tumblr down with it.

Some say that 1 billion is a big expenditure for Yahoo, but it could be the answer to Yahoo’s problems. Tumblr is popular with the coveted age group of 18-34 years old, something that Yahoo direly needs at this point. This drawing in of kids and mobile device users is the popularity push that they’ve been searching for.

It is true that younger ages don’t use Yahoo much anymore, compared to years ago when it actually was viable competition. However, these younger age groups surely know of Tumblr and for the most part Tumblr is geared towards them as well. Tumblr blogs also have a high visitor retention rate (85% compared to Twitter’s 40%), proving that they are among the top social sites of the time.

However, the question stands that this could simply be a ploy to increase the counter offers of more favorable companies. It isn’t a far stretched idea, seeing as Yahoo has been the victim of this in the past. There has already been talk of Facebook and Google showing their interest in Tumblr. Let’s face it, Tumblr may even be wise to team up with one of the companies that has shown year to year reliability. These sites have proved their ability to adapt and create better things, while Yahoo just tries to stay afloat at this point. Google even recently began talking about a same-day delivery service proving that Google is taking another step away from just being a search engine. It’s not just an issue as to whether it’s a good deal for Yahoo or not, Tumblr is likely to be risking a lot to side with the unpopular kid of the schoolyard.

It could easily turn into the death of Tumblr, with people in a year or so saying, “What ever happened to Tumblr? Remember that thing?” Yahoo is a big company, sure, but would it be smart for Tumblr to join them just based on that? Yahoo has been known in the past to buy sites up like this, only to end up bombing it to where both companies lose out.

So, even if this deal could shoot Yahoo back up next to the others, it may be a higher likelihood that Tumblr is in fact using them as a counter off ploy.

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