Yahoo Board Approves a $1.1B Pricetag For Tumblr 142
TechCrunch reports that Yahoo's string of acquisitions may soon include Tumblr: "The Wall Street Journal is now reporting via Twitter that the rumored $1.1 billion cash acquisition deal for social blogging site Tumblr has been approved by Yahoo’s board of directors. The Tumblr acquisition was rumored last week, with a price tag reportedly north of $1 billion, which appears to be accurate if the WSJ’s sources are correct." The article notes, too, that "Yahoo had only $1.2 billion cash on hand as of its most recent quarterly earnings, which makes an all-cash offer for Tumblr a lot more of a stretch than it would be for someone like Apple, or even Facebook, which acquired Instagram for $1 billion in a mix of both cash and stock."
Making this... (Score:2, Insightful)
The first Yahoo owned content online I will have actually visited since 1998
Re:Strange (Score:5, Insightful)
Not strange at all. Marissa Mayer isn't capable of doing much besides making overpriced acquisitions and hires.
Here's (yet another) social blogging platform with no clear revenue model.
"Social" is a lose (Score:5, Insightful)
Despite all the noise, almost nobody is making money in "social". Even Facebook isn't very profitable, despite its size. The business strategy in "social" seems to be to give the service away for a few years, build a following, then crank up the density of ads until the users get fed up. Worked for Myspace, right?
Facebook traffic peaked about a year ago. Twitter is now exploring the user's threshold of pain with "sponsored tweets". This is robocalling in another form.
Basic truth: ads with search results are useful to users and effective for advertisers, because they're presented when the user is actively looking for something relevant. Ads on "social" are merely annoying because the user is looking at what their friends are doing.
Re:Strange (Score:5, Insightful)
Current stock prices are not a predictor for the future. Well understood by anybody that cared to find out.
Re:Strange (Score:5, Insightful)
+1
I remember laughing my ass off a while back when one of the CEOs in the long line of CEOs at HP said that the stock market is an objective measure of a company's performance. That was a little bit before the dotcom crash IIRC.
Re:What a scam (Score:5, Insightful)
Who cares why? It's a game of roulette.
Re:What a scam (Score:5, Insightful)
Who cares why? It's a game of roulette.
The reason our economy is fucked, distilled in one sentence.
Re:Let's see (Score:5, Insightful)
Traditional stock valuation methods kind of assume your company isn't a fad that could implode in a heartbeat. There's nothing to think Tumblr has survivability better than say, MySpace. Yes, I can see paying a billion for something that generates 100 million a year...if there's a good reason to think that asset will last more than 10 years. Free-to-use websites that generate 100 million a year for more than a decade are unicorns.
Re:So what? (Score:4, Insightful)
You're not wrong, but I had to laugh at the idea of "ruining" GeoCities. That sort of implies that at one time GeoCities was not ruinous, and then became so.
Re:Let's see (Score:5, Insightful)
So, to reorder your numbers a bit,
100m in projected revenue / 40m in cost of goods this year = 60m in profits. (40m is from wiki's original source, numbers are projected, so....)
1.1b market cap / 60m profit = Price/Earnings ratio of 18.
P/E ratio for the S&P is 14.
It looks like it has high growth, that would push the numbers up. Huge risk / numbers are projections / I am doing the numbers on the fly without all of the accoutning number - would push the numbers down.
Ah yes, we should always base P/E ratios on the "hoped for" earnings over the next year, especially when they're about an order of magnitude higher than the real world numbers from right now.
Do none of you fight for the users? (Score:5, Insightful)
No, I'm not talking about the irritating tween idiots. I'm talking about the artists. For every groupthink mob of self-entitled screaming idiots shouting their misinformed opinions at the top of their tiny little lungs, there's an artist taking advantage of the dead simple microblogging platform.
Tumblr is the home of the Drawblog (contains art), the Ask (ask a character questions, receive drawn responses) blog, and the art compilation blog. To my knowledge, none of these things substantially exist outside of tumblr. Sure, I could follow an "art appreciation" group on facebook, but because facebook doesn't deliver stuff to me in anything resembling chronological order it's largely useless to me.
I am worried. Legitimately worried that Yahoo is gonna screw up Tumblr.
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Re:Strange (Score:5, Insightful)
While we like to mock CEOs, at the end of the day they got to where they are by being good at what they do...
This is a false premise. It is just as likely that they have gotten where they are by social acumen, and have no idea what they are doing.