Billion Dollar Baby: Yahoo’s Tumblr Acquisition and PR
On May 20, Yahoo! CEO Marissa Mayer confirmed rumors that the company plans to acquire Tumblr for $1.1 billion. (You may recall Mayer as the one who personally promised not to “screw up” Tumblr.)
For those not familiar with the service, take a walk down memory lane with me. Before there was social networking, there were blogs. And at one point in time, the concept of blogging without trying too hard became known as microblogging. In essence, Tumblr is part microblogging, part social networking. Recent estimates say that Tumblr currently boasts 50 billion blog posts, 300 million monthly unique visitors and 120,000 daily signups (as of May 20, according to Mashable). Mayer estimates the total audience for the two sites could reach around one billion people.
With all of that said, will the purchase have an effect on PR and communications professionals and the brands they represent? While it’s still too early to say for sure, the most apparent difference for the communications industry and Tumblr users has to do with the big “a” word: advertising.
Tumblr introduced its ad program last May. According to Todd Wasserman of Mashable, after previously stating that Tumblr was opposed to advertising, CEO David Karp was very particular about the placement of ads, restricting it on a user dashboard so as not to interfere with the Tumblr experience. Not surprisingly, the ads only brought in $13 million last year. (To put that in perspective, consider that Facebook reported ad revenues of more than $5 billion in 2012.)
But according to Business Insider, Tumblr can help Yahoo increase its advertising revenue exponentially by several key factors, including:
- Selling more ads by using Tumblr’s 120 million daily impressions properly
- Selling more effective ads that are native to the format of the platform
- Selling better targeted ads. Tumblr’s social networking properties allow users to follow other blogs and users that are reflective of their interests. With this insight, Yahoo should be able to tap into this information and target ads, much like the advertising on social platforms like Facebook.
So, will the new ad model be worth more than the $1.1 billion Yahoo paid? How will advertising affect the Tumblr experience? Will it make the platform a viable channel for communicating for/with brands? Only time will tell.
Tell us what you think in the comments below!