Has Mayer made a smart move by acquiring Tumblr?

Yahoo Inc. purchases Tumblr, a micro blogging service with multitudinous visitor traffic, for 1.1 billion to keep up with the cut throat competition that it faces from the social networking sites like Google and Facebook. A headlong rush to boost the revenue and monetize the eyeballs impelled Yahoo! to opt for this bold move which is expected to reverse Yahoo’s dip in the cash flow and web traffic.

David Karp - Tumblr & Marissa Mayer - Yahoo!
David Karp – Tumblr & Marissa Mayer – Yahoo!

Tumblr functions both as a blog and social network that enables users to post and share audio, videos, and short pieces of writing. It targets the youth market and thus Yahoo! anticipates a dramatic growth in its popularity by attracting users with quality services that will turn it into a hot website. In an interview on Monday, Yahoo! CEO Marissa Mayer was reported saying that Tumblr purchase aims at increasing the number of page views and interactions on yahoo which is a strategy to elevate the traffic on the established website. Also, it will provide an access to the exclusive content of Tumblr which does not overlap with the content on Yahoo! thereby presenting different and new information on wide range of subjects without any plagiarism.

With the acquisition of Tumblr which has more than 100 million users, Yahoo! plans to breathe life into its essential products like mail, finance and sports. Yahoo’s huge existence on computers has not shifted at same level to the mobiles. Since Tumblr has already been killing it in mobile, it will aid Yahoo! in building up neoteric mobile services.

This alliance is also believed to draw benefits to Tumblr. Despite a massive user base, Tumblr’s revenue was only $13 million last year. Hence this deal is reckoned to be a mutual agreement between the American Multinational Internet Corporation (Yahoo!) and the renowned micro blogging platform (Tumblr) which will assist in fetching the desired traffic to the former while roping in more money to the latter by selling its ads.

However, Tumblr has not been entirely sold to Yahoo! and David Karp, the founder and CEO of Tumblr, will be running the Tumblr service without any change in the location of the headquarters and his team. Moreover, Tumblr looks at Yahoo! as a promising partner in building up its sprouting advertisement spunk.

On the flip-side, there are risks involved for Yahoo! in this deal as Tumblr has many pages of racially insensitive, pornographic and sexually oriented content which wouldn’t be an attractive option for the advertisers. What is more, there may be a decrease in Tumblr’s demand among certain users due to the extreme pugnacious attempt to bring in advertising revenue.

After purchasing Tumblr, Yahoo! now freezes its eyes on Hulu, one of the video streaming services which is up for grab. However, the risks involved in the Yahoo!-Tumblr synergy have raised scepticism about the accomplishment of the desired target. Let’s hope this endeavour of Mayer helps rejuvenate the position of Yahoo! and lead to a boom in the annual revenue of the company which has stuck at $5 billion for the past few years.

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Hope this formula helps in restoring the popularity of the fading pioneer, making it a hit again among the internet users.

ALL THE BEST YAHOO!