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How Tumblrs and Investors (and Investors on Tumblr) Covered the Yahoo Deal

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Not everyone was as thrilled with the news as the VCs behind the blogging platform.

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By now, you have heard that Yahoo (NASDAQ:YHOO) CEO Marissa Mayer just made her seventh and perhaps most important acquisition during her tenure: A $1.1 billion acquisition of Tumblr, a blogging network based in New York. This acquisition marks a major turning point for the Internet media giant.

To say that reactions vary is a massive understatement. To sum up how different constituencies reacted, we'll illustrate in classic Tumblr fashion: the GIF.

Venture Capitalists

The venture capitalists that got in early were all like:



Understandably, getting a 100% cash buyout is the best possible outcome for Tumblr, which had so little revenue to date that it won't have an easy time going public. Last year, Tumblr pulled in $14 million in revenue. So the VCs are taking a well-deserved victory lap.

On his own Tumblr blog, VC Bijan Sabet of Spark Capital praised CEO David Karp for his business style, which was always a far cry from being motivated by profit. In an interview, Karp said that the Web advertising that keeps the lights on at Yahoo "really turns our stomachs."

"Over these years, being an investor and board member in Tumblr has taught me many things," Sabet wrote. "I learned the importance of a founder-led company. I learned that it's best working with people you admire and care for. And I learned there is more than one way to build a company."

Also on Tumblr, Union Square Ventures partner Alex Wenger is excited about the two companies benefitting from each other.

"When Marissa took over Yahoo, I expected that acquisitions would play a role in her transformation of the company," Wenger wrote. "At the time I wrote that the ideal target would be 'startups that have very talented people and also interesting products but could benefit from the scale of Yahoo.' Tumblr fits that bill perfectly."

Fred Wilson, the superstar tech investor and must-follow blogger at USV didn't mention the Tumblr deal specifically, but put in his two cents about investors taking the credit.

"1 -- the management team always gets the credit. VCs don't do the dirty work and should not get the accolades when things work out. 2 -- don't gloat. It's not becoming. Humility in times of great success is a very becoming characteristic," he wrote.

Yahoo Investors

As far as the stock market goes, the needle barely moved following the deal's announcement. You might say that the glass is half full, and the stock market in general is OK with Yahoo putting over $1 billion in cash into a startup. Or if the glass is half empty, you might say that this isn't the game changer that it should be. Only time will tell.



Household-Name Tech CEOs

Mayer and Karp together posted a cheeky GIF on the news that they made over the past month.

They made light of the two companies' vastly different cultures:



Mayer has famously outlawed the option of working from home for Yahoo (thus her "WFH" speech bubble), much to the ire of moms who work there. And much of Tumblr is extremely Not Safe For Work (NSFW).

Several reports raised the issue of the conflict between Yahoo's more buttoned-up family-friendly image and Tumblr's more edgy content, but Mayer seems to be fine with the plethora of porno on Tumblr. "It's really important to have great community tools like 'NSFW' that Tumblr already has in place," she said. Looks like that isn't about to change.

On Mayer's newly minted Tumblr, she didn't glaze over the fact that it might not sit well with users and vowed "not to screw it up."

The Tumblr staff blog also tried to subdue worries that the two cultures would crash.

"Before touching on how awesome this is, let me try to allay any concerns: We're not turning purple. Our headquarters isn't moving. Our team isn't changing. Our roadmap isn't changing," Karp wrote. "And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn't changing."

Karp later blogged his excitement that the deal "turned the Times blue."

Tumblr Users

Users' reactions were mostly not positive.

Yahoo has a history of buying startups only to neglect them. This post from a brilliant blogger pretty much sums up the way many Tumblr users felt when the deal was confirmed. There were plenty of similar Tumblr posts tagged #yahoo yesterday.





Users are concerned that getting acquired by a big ancient corporation is going to kill the quirky nature of Tumblr and the community based on self-expression (among other things).

Surprisingly, most the sites we identified as The 18 Best Financial Tumblers last December said nothing about the Yahoo purchase.

In 2005, it acquired Flickr for $35 million, and today, Flickr is way behind the likes of Instagram and even Imgur. It's hard to explain to the young'uns how cool Flickr used to be. Before Flickr, you needed an old-school FTP client just to put a photo on your blog. Speaking of blogs, put Geocities on that list, too. After spending $2.87 billion buying the proto-blogging platform that gave all of us our first awful websites, Yahoo shuttered the whole thing in 2009. Tumblr users are afraid this might happen again.

But before you teens join the herd and move your blog to WordPress, note that Yahoo just gave a signal that it's serious about keeping its beloved media properties awesome. On Monday afternoon, Flickr mailed its users that they all now have a terabyte of space.




At this point, nobody can judge Marissa Mayer's acquisition. As a former Google (NASDAQ:GOOG) executive, she definitely saw how strategic acquisitions (such as YouTube and Android) can pay massive dividends, so she probably knows what she's doing.

Mayer is hoping that the deal will be as smooth as Google's purchase of YouTube, which lacked substantial revenue in 2005, but is a major part of Google's portfolio today. As she promises to do with Tumblr, Google mainly left YouTube alone for years. Hopefully, for the Internet's sake, this acquisition will turn out more like YouTube than Geocities.

Twitter: @vincent_trivett
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