Yahoo has been hailed in some quarters for buying Yahoo for buying Tumblr, a photo-heavy blogging service, for $US1.1 billion.
The thinking is the buy will help struggling Yahoo reach younger, hipper users.
The deal netted co-founder and CEO David Karp, 26, around $US209 million cash (the balance of the company was owned by various venture capital funds).
Karp certainly weighed in with a young, edgy response, posting "F**k yeah" (without the asterisks) as the deal was closed, reportedly after just six weeks of talks initiated by Yahoo.
Personally, I struggle to see how the deal will be transformative for Yahoo.
Internet years are like dog years, so it's tricky to call a site founded in 2007 the next big thing.
Tumbr's still the market-leader for blogging, with an emphasis on photos, but it now faces huge indirect competition from Facebook, recent Facebook acquisition Instagram, Pinterest, Google+ et al.
Certainly, the deal won't be accretive to Yahoo earnings.
The site introduced advertising last year. Bloggers can now pay to make a post more prominent. But it was done in half-hearted fashion - possibly because Tumblr feared a backlash from users, and partly because the whole concept of monetizing the site didn't really sit well with the Karp and his hipster team. "[We're] pretty opposed to advertising. It really turns our stomachs,"
he told the LA Times in 2010.
By one estimate, Tumblr lost money on just $US13 million in revenue last year. At any rate, with just a smattering of ad activity, and the cost of hosting 110 million blogs, it's hard to disagree with any assessment the site is in the red.
The laid back Karp will stay on as CEO.
But I wonder how he will gel with tightly-wound Yahoo boss Marissa Meyer, who recently banned working from home, and possesses the hard-nosed monetisation approach of her former employer, Google.
Another point of contention: while many Tumblr blogs are hip and happening, like Karp's personal effort, www.davidslog.com
, the service has also developed something of a reputation as a home for a lot of low-rent porn.
Karp has told media he'll have the freedom to run the site his way, and in announcing the deal, Mayer said she would let "let Tumblr be Tumblr."
That's a bit of a stretch. But there's no doubt the media will continue to focus on Tumblr blogs such as those name-checked by HuffPo such as "Porn and weed" and "Secretary Sex."
Mayer says ads can be targetted, but there's no doubt at some point she's going to have to push for a clean up - and more monetisation options across the board. It'll end in tears.
Personally, as an occassional Yahoo user I'm far for excited about the fact the limit for photo sharing service Flickr has been dramatically bumped up to a terabyte - or more than 10 times what rivals are offering. That's a genuinally game-changing move (if one that in the short-term obliterates the only real way to monetise Flickr - the Pro accounts that offered extra space, and which were pushed by partner Telecom).
Anyhow, it's an interesting point to revisit wen the younger - or at least even younger - David Karp bowled into Auckland for a web developer conference in 2009 (and, it seems from a later post, to find love
Here's what he had to say to NBR:
Met the boss of Tumblr, the next big thing after Twitter
APRIL 17, 2009: David Karp, all of 22 years old, strolls into Auckland’s Web09 conference buzzing on pseudoephedrine (for a head cold), and with $US5.25 million VC cash in his pocket.
Some in the US business press are calling blogging service Karp founded, Tumblr, the next big thing after Twitter.
In December, venture capitalists agreed, with Tumblr raising $US4.5 million in a round led by Union Square Ventures and Spark Capital, topping up an earlier round of $US750,000.
Two-year-old Tumbr now hosts around 900,000 blogs (up from about 200,000 this time last year), read by 30 million unique browsers a month. Celebrity Tumblrs include Katy Perry, Pete Wentz and John Legend; four book deals have been signed by less well-known scribblers via the site. Cnet director John Maloney has come on as president.
We may be in recession mired 2009, but talking to the starry-eyed Karp, with his green sneakers and mopey haircut, I feel like I’m back in the days of the dot.com boom.
Yet, he seems to have all the angles covered. Often, Karp speaks like someone in the mid-phase of their career trajectory. And, in a way he is.
Karp was home-school until he was 15 (learning Japanese), then dropped out after a brief stint at the Bronx School of Science. By 17 he was living in Tokyo, but remote working as CTO for a New York-based dot.com called UrbanBaby.
By 20, he had his own consultancy company, consisting of himself and an engineer sidekick.
Two years ago, Karp spotted a gap in the market for a new blogging service, offering user-friendly “tumble-logs” - blogs that were easy to update and, equally importantly, put you in control.
Specialised blogging services like WordPress and Blogger offered oodles of customisable features, but were too hard to use (as I current user of Google’s Blogger user, I’d agree on that point).
The likes of YouTube and Flickr were powerful, but one-trick ponies.
And while Facebook was deservedly popular for its user-friendliness, it put your profile out of your hands.
Karp says, “For our generation, sorry, my generation [as your correspondent stares into his coffee] it’s not about privacy. But we do want control.
“The first thing a potential employer does is Google you. If they find your Facebook profile, a lot of it could be photos of you tagged by other people. You’ve got to control your own profile on Google.”
Tumbr does just that, putting you in control of your blog, and making it easy to update.
I ask Karp about his plan to make money.
Like Twitter, Tumblr serves no advertising, and has no plans to. Revenue, right now, sits around zero.
On this point, Karp is pretty relaxed.
The latest round of funding gives Tumblr enough funding for the next two or two and a half years.
During that time, Karp plans to build the sites membership, and focus on developing premium services that users will be willing to pay for. These will involve extra features not available on other blogging sites, plus practical things like assistance with design. People may also be able to pay for a more visible presence (a model also being explored by Twitter).