It’s easy to forget that Yahoo has had a long on-again-off-again love affair with online video. Remember Broadcast.com, which kicked off the Mark Cuban Era? But you might not remember that, because other online video platforms long ago left Yahoo in the proverbial dust. Today, as Yahoo streamed its Flickr product and Tumblr acquisition announcements, we were given a demonstration of why Yahoo has been left in the dust — and why it’s had to turn to acquisitions for help in, well, nearly every department.
The event was nearly impossible to watch. Because, well, you know, Yahoo! As you’ve heard by now, Yahoo has been on an impressive buying spree over the last month — including, by the way, a scuppered deal to boost its video tech and buy the “YouTube of France,” Dailymotion — snatching up a new company seemingly every week.
But today, the company raised the bar even higher with the $1.1 billion acquisition of Tumblr, hoping to turn back the clock and gain access to Tumblr’s millions of young users.
The company held a media event in New York City this afternoon to formally announce the acquisition — along with sharing the news that it will be moving into new digs in Times Square — but something was stealing the spotlight from Mayor Bloomberg and Marissa Mayer. And that would be Yahoo’s questionable video tech. Those who watched the event from home spent most of that time enjoying a hiccupy stream. Or none at all.
You can see the error message above. The video-streaming technology is Yahoo’s own, running through Yahoo! Screen, first launched back in 2006, renamed Screen from Yahoo Video. With all the acquisitions Yahoo has been making of late, it makes one think that, for its next acquisition, Yahoo should go for some new video technology. Of course, after Tumblr, it may be broke.
But, come on, Yahoo has somehow become the Rudy story of the tech industry. At the very least, someone should launch a Kickstarter page so that it can continue to make acquisitions.
Today has been quite a roller coaster ride for Yahoo — the company put days of reports and rumors to rest this morning when it confirmed that it would acquire the social blogging platform Tumblr for $1.1 billion, and now CEO Marissa Mayer has confirmed that Yahoo’s New York employees will now be moving.
They’ll all soon be working right around the corner from Times Square in the same building that used to house the New York Times (229 West 43rd Street, to be more specific).
The move is meant to unite the nearly 500 Yahoo employees that are currently split among three existing locations in New York City, though Mayer made it very clear that the newly acquired Tumblr team wouldn’t be folks roped into working out of the central office — David Karp and the rest of the team will continue to work out of their 10th floor office near Gramercy Park. This whole thing is reminiscent of Mayer’s edict that saw the end of remote working for long-time Yahooligans. In a memo issued by Yahoo human resources head Jackie Reses back earlier this year, it was revealed the brass though that “speed and quality are often sacrificed when we work from home.”
While that’s unlikely to be the case here, Mayer has shown herself to be a vocal proponent of the sort of work that can be done by bringing employees together, and it seems the Yahoo New York team is only slated to grow from there. Just before New York City Mayor Michael Bloomberg took the podium to deliver a few remarks, Mayer noted that the space the team will soon move into can hold an additional 200 or so people, and a post on the official Yahoo Tumblr account (that was fast) indicated that the company wants to pump up its New York staff “by up to 60 percent.”
Of course, this isn’t the only news that Mayer and company have in store for us this evening — some prominent Flickr signage means that there’s some product news in the pipeline as well.
UPDATE: Mayer just pulled back the curtain on the new and improved Flickr, and it is awesome.
How much of Tumblr is porn, and what is Yahoo going to do about it? On the latter, Yahoo CEO Marissa Mayer spoke to its plans for addressing content that is not “brand safe” earlier this morning on a call about its $1.1 billion acquisition of the site, saying that Yahoo will need to have “good tools for retargeting,” and will “monetize in a way that is tasteful.” But as for the former, it’s often been something of a black box – there simply wasn’t publicly available data.
However, now, we may have some answers. According to an analysis of Tumblr’s 200,000 most-visited domains, 22,775 of them are adult – or 11.4 percent. The analysis was performed by web measurement firm SimilarGroup, a company which raised $2.5 million earlier this year with the intention of competing with Alexa’s stronghold in web rankings.
The measurement firm analyzed the volume of visits to these adult subdomains, and found that 16.6 percent of the traffic that visits Tumblr takes place on adult blogs.
In addition, 22.37 percent of incoming referral traffic from external sites to Tumblr is from adult websites, making that the leading category for referrals. Meanwhile, 8.02 percent of outbound traffic from Tumblr goes to adult websites.
Below are some screenshots from SimilarWeb Pro, which shows Tumblr data from the past year (May 2012 to April 2013), detailing the breakdown of referrals and outgoing links:
Neither Tumblr nor Yahoo responded to requests for comment, as of publication time.
Tumblr’s secret to successful growth back in the early days, was in fact, its adult content. In some circles (read: mainstream users, typically men), it’s what the site is still known for today. Anecdotally, this is the kind of thing I hear all the time when I bring up Tumblr among members of this not-so-tech-savvy group: “Oh, you mean that porn site?” Uh-huh.
To be fair, any site that relies on user-generated content is going to have a porn problem – even Instagram and Pinterest get dirty at times. But Tumblr seems to be better known for it than the others.
Still, Mayer is right – it’s a matter of targeting Tumblr’s ads correctly when they do go live, to make sure that porn and brands are not living side-by-side on the same page.
All Things D broke down why Tumblr’s porn stash is not a problem for Yahoo, explaining that Tumblr’s ads appear in the sidebar of the Dashboard – the home page feed where people follow the blogs they’re following. Another type of advertisement called “spotlight” ads, promotes Tumblr blogs in a directory of suggested account. Neither of these types of ads are hitting the users who come to Tumblr for the adult fare.
That’s because, users in search of Tumblr’s adult content are usually doing just that – searching. (And with the “Safe Search” filter turned off, course.) These folks don’t see Tumblr’s ads now unless they actually subscribe to adult sites. However, that doesn’t necessarily mean they’ll be immune to all the ads in the future.
Mayer also discussed today Yahoo’s future advertising plans, saying that it may work with bloggers to provide ads that run with their permission, and plans to integrate Yahoo’s search functionality on Tumblr’s site, too. In other words, Yahoo will need to be very careful when rolling out its additional ad formats to make sure brands and pornography don’t get too tangled up.
After all, it would only take one screenshot of some supposedly family-friendly household name next to a video of “hott girlz doing xyz” to cause major controversy and possibly harm to Tumblr’s own brand.
Currently, brands marketing on Tumblr aren’t worried about the adult content, says Hayes Davis, CEO of Union Metrics, whose company now tracks over a 100 million events on Tumblr per day, including posts, reblogs and likes, out of Tumblr’s over 107 million blogs and 50 billion total blogs.
“Tumblr is becoming a strategically important marketing channel for these brands, and they are making large investments in the platform. Just this year, we’ve signed up brands and agencies that represent myriad industries, including higher education, entertainment, fashion and beauty, sports, consumer products, travel, technology, news and retail,” says Davis.
Marketers love the viral engagement and staying power around branded content on Tumblr, he explains, saying that posts live for far longer on the site than on other networks. That data point was also hinted at in Tumblr’s own reveal today that out of the 50 billion blog posts on the site today, only 5 billion are original content – the rest, presumably, being the re-blogs (re-sharing another’s content on your own blog).
But as for the NSFW content, according to Union Metrics, “it frankly never comes up in any of our discussions.”
Time will tell if that still remains the case in the future.
Also of note? Mayer just blogged this:
Have you ever dreamed of becoming a mega-millionaire with your next business idea? It’s a reality for 26-year-old David Karp. The founder of Tumblr, the popular social blogging platform, has become the latest tech tycoon almost overnight.
Today Yahoo officially announced plans to purchase the site Karp started at age 21 out of his mother’s Manhattan apartment. The Daily Mail has Karp’s story as a high school dropout who taught himself HTML. Karp then started his own computer consulting company before launching his incredibly popular platform.
Yahoo’s board of directors recently approved a $1.1 billion cash purchase price for Tumblr, according to a report from AllThingsD.com. In an official announcement, the companies said Tumblr would continue to operate as a separate business with CEO Karp at the helm.
Tumblr, a blogging platform that has following, sharing and other social features, gives Yahoo a stake in the social networking world, The New York Times observes. The platform also provides a source of user-generated content Yahoo management believes the company needs. How Yahoo would integrate Tumblr content into its current model remains to be seen.
Initially, the two companies will work to create advertising opportunities that are “seamless” and “enhance the user experience.” But a joint announcement was not specific about what kinds of advertising opportunities these might be.
Tumblr boasts 300 million monthly unique visitors and 120,000 signups every day, 900 posts per second and 24 billion minutes spent on site each month. The two companies state in their joint release that this makes Tumblr one of the fastest growing media networks in the world.
Even Small Business Trends has a Tumblr presence.
The announcement said the deal is subject to the customary conditions and will close in the second half of the year.
Photo Source: Davids Log
The post $1 Billion Tumblr Deal Turns 26-Year-Old Founder into Mega-Millionaire appeared first on Small Business Trends.
After announcing its deal to acquire Tumblr for $1.1 billion, mostly in cash, Yahoo today started to lay out some of the details for how it intends to make use of the property while trying to stick to its promise “not to screw it up.” Expect more advertising by next year as well as more Tumblr content on Yahoo properties, but more of a cautious step as to how Yahoo will deal with some of Tumblr’s more NSFW content.
Here are some of the more interesting details revealed in the call:
What are Tumblr ads going to look like? Tumblr apparently made only $13 million in revenues last year but CEO David Karp apparently thinks the site is “ready” to make more now that it understands its users, according to Yahoo CEO Marissa Mayer. But she also noted that they will be working from a challenged position, not just because of user resistance but because Karp himself has been “skeptical” about online ads.
In the conference call, Mayer made an early reference to how Tumblr would be able to make good use of Yahoo’s advertising technology, in ways that fit Tumblr’s so-far successful, image-based, quick-blogging, youth-oriented format — what she called “native advertising formats.”
As one example, she pointed to an ad format that Yahoo launched at the end of April, in-stream ads that it runs on its news pages. “On Tumblr we feel we can monetize in ways that are meaningful and add to user experience,” she said. She cited the Tumblr dashboard, or as she called it, the inbox for the blogs you follow. “Today Tumblr already does some ads in that feed. We would like to look at that and understand how to introduce more ads where the ads fit the expectations and follow that form and function.” She also noted that Yahoo may possibly work with bloggers to provide ads that will be run with their permission.
On top of this, expect to see more search ads: there are also plans to integrate Yahoo’s search functionality into the site as well. “We think there is a complelling search story,” said Mayer. “Their body is 50b posts and 5 billion posts of original content so search is already vast. We see an opportunity to integrate with search and provide that. That’s one area we are excited by the acquisition.”
Throughout this, a focus on trying to be Tumblr-centric about whatever Yahoo tries to do there. “It’s not a choice between creativity and monetization,” insisted Mayer.
So when are those ads coming? CFO Ken Goldman said that ad revenues from Tumblr will be “modest” this year — the acquisition is not expected to close until the second of of 2013 — but that they will “ramp up” in 2014 “and beyond.” “We do think those revenues will start monetizing materially [and] will contribute to revevenues in 2014 and beyond,” he said on the call, “not just standalone for Tumblr but also incrementally, helping Yahoo to growth.”
Porn? The NSFW, notorious part of Tumblr was never referred to by name, but an analyst did ask about what Yahoo, while courting mainstream brands to market to that attractive Tumblr audience, would do about content that is not “brand safe”. “The richness and breadth of the content… is what makes it more exciting,” enthused Mayer. “In terms of addressing concerns around brand safety we need to have good tools for retargeting.” [Another acquisition, methinks? In any case, no outright announcement that Yahoo intends to get rid of all those sites that Tumblr has more or less accepted into the fold.]
Mayer continued: “Tumblr is now at the point that they do know what it is and what makes sense to monetize in way that is tasteful.” She also mentioned due diligence but also something else, effectively implying that Yahoo will figure out a way of getting around the NSFW content and serving ads where they want them to go, because that’s what the advertisers want: “There are a lot of marketers eager to participate in Tumblr platform and the demographics,” she said.
What does the $1.1 billion “substantially in cash” mean? Goldman noted that it’s effectively an all-cash deal, save for some shares in Yahoo for David Karp. He also noted that Yahoo still has “ample cash” for more acquisitions and investments, to the tune of about $6.2 billion. These will not likely be along the lines of Tumblr in terms of size. “This is an exceptional company and team,” she said of Tumblr. At 300 million monthly unique users, Yahoo is paying about $3.67 per user for the acquisition.
Complementary properties. Mayer made a lot of the fact that Tumblr and Yahoo actually fit “really beautifully together,” like South America and Africa, in her words. In addition to Yahoo skewing older and Tumblr skewing younger, “We are strong on sports, finance and news; Tumblr’s strong on architeture, travel and fashion. We need great tools for content publishing and creation. They have them. Tumblr prides itself as a home for brands. Yahoo is all about brands.”
Tumblr comes to Yahoo. While a lot of the expectation so far has been about how Yahoo may mess up or spiff up or monetize up Tumblr, another theme that emerged during the call was the idea of Tumblr content going out to Yahoo properties — a way of attracting users to Yahoo that may not have gone there before.
“Our strategy is to let Tumblr be Tumblr,” said Mayer. “There are some who will always prefer Tumblr and will never come to Yahoo. [But] as we pull Tumblr content into our news feed and media experiences it will cause them to become that much more interesting and richer and will cause more to come to Yahoo. I imagine engagement will improve as we incorporate that content.”
Flickr. There is a separate news conference today that will likely concentrate on updates to Flickr, but today Mayer appeared to douse out speculation that it will be a move to begin integrating its online photo site with Tumblr in any way: “In terms of how the content of Tumblr evolves it depends on the creators,” Mayer said in answer to a question of what this acquisition will mean for Flickr. “It’s something that we will turn our attention to in the future. It will provide great storage, but we will see how those two cousins should relate to each other.
Image: Tumblr (where else)