Tumblr Is an Idiotic Deal. But It May Not Be Dumb - Tom Cunniff

A confessionIf 20yearold high school dropout David Karp had shared his vision for Tumblr with me when he started coding it in 2006 I know what I would have doneI would have tried to be kind and avuncularI would have tried to gently explain why having no business model was a bad ideaI would have pointed out that allowing porn sites would probably doom any chances heamp8217d have of being acquiredHe probably would have argued with me He might have even gotten really angry with me He was 20 years old after allIf he had screamed at me I wouldnamp8217t have argued back I wouldamp8217ve said amp8220Look if you really believe in this thing I wonamp8217t tell you not to pursue it All Iamp8217m saying is amp8211 no disrespect meant amp8211 youamp8217d be wise to have a Plan Bamp8221Then amp8211 as he walked away amp8211 I would have rolled my eyes Silly kid Fastforward to 2013 I39m wrong on all counts He39s a billionaire Well not quite but heamp8217s a hell of a lot closer than most of usSo it goesOpportunity Meets DesperationThis is an irrational deal forged in an irrational marketplace made in hopes of persuading irrational people to assign irrational relevance to YahooAs my friend Jonathan Yarmis said in his assessment of the dealamp8220In the best of circumstances acquisitions are hard andamp8230 Yahoo has never been in the best of circumstances whether it was a dysfunctional board trying to prove it39s smarter than the last dysfunctional board whether it39s a viper39s nest of competing fiefdoms whether it39s a lack of a clear consistent strategic visionamp8230This reeks of opportunity meets desperationquotPart of me is inclined to think that the estimable Mr Yarmis is being too kindButamp8230 part of me is painfully aware that I may be as wrong about this as I would have been about Tumblr in the first placeAs idiotic as the deal may seem on the surface the acquisition may Make people more inclined to let Yahoo come and in pitch Help attract engineering talent who might not have considered Yahoo Give Yahoo a fresh story to tell in mobile and some alluring hope around native ads Persuade Wall Street to be more patient about the turnaroundThe Strange Physics of YahooThe physics of running a company the size of Yahoo is a hell of a lot different than most normal businesses in the same way that riding a tricycle isnamp8217t quite the same as piloting the starship Enterprise In todayamp8217s digital universe Yahoo can find a billion dollars by digging in the couch for loose change And Wall Street just might raise its stock price for the acquisition by enough to make the deal look like a relative bargain over timeWhat seems like common sense to most of us might make no sense in that environment at allSo reluctantly I have to admit that Tumblr may well be worth a billion dollars to YahooI still think it39s an idiotic deal But that doesnamp8217t mean itamp8217s dumb Tom Cunniff is the founder of Cunniff Consulting an integrated marketing consultancy that helps consumer brands and leading companies in Big Data Social Media and Mobile succeed Frequent speaker and panelist Chairman of the Association Of National Advertisers Digital Committee He can be reached at tomtomcunniffcomRead all Tom39s MediaBizBloggers commentaries at Radical Common SenseCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Tumblr Is an Idiotic Deal. But It May Not Be Dumb - Tom Cunniff

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