Disclaimer: I have a personal interest in Yahoo. I provide occasional “content.” I do not own stock in Yahoo
Yahoo CEO Marissa Mayer is near completing a deal to buy Tumblr, a “buzzy startup,” according to the Wall Street Journal. The going price is $1.1 billion dollars, a figure skeptical Wall Street analysts say is expensive for a company producing little income.
That sort of skepticism is inherent in an information universe which has seen the stumbles of the Facebook, Zynga, and Groupon IPOs. The hype surrounding the Facebook IPO a year ago was like a rocket that fizzled on the Launchpad. The financial analysts, the money men and women, the brokerages, and everyone trying to take advantage of a worldwide site that has an estimated 483 million “daily active users” all did a face plant.
But the past is not always prologue in the cyber universe, as evidenced by the current Google gazillion dollar stock price. The same stodgy crew became apoplectic when Google bought YouTube in 2006 for $1.65 billion. Where was the ad money going to come from?
High school dropout like Tumblr founder and CEO David Karp doesn’t have such mundane concerns. According to the IT website smh.com, Karp once said he didn’t want to be “gobbled up by big media company.” In a Hollywood Reporter interview, Karp told users “we’re not turning purple” and then he punctuated his statement with an F-Bomb.
A 2008 New York Observer article profiled Karp’s unusual trajectory from its startup in his mom’s New York apartment.
On the other side of the transaction is new CEO Marissa Mayer who has faced skepticism from Wall Street even as Yahoo stock climbed. Mayer announced the acquisition on her own Tumblr page with incandescent fervor:
“We promise not to screw it up. Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently. David Karp will remain CEO…”
The financial media is right now very excited about the acquisition and it’s fun to watch the spin, the insinuations, the conjectures, the analysis, the 411. The fact that Yahoo and Tumblr are right now on the lips of everyone in the information technology analysis business might in itself be worth a billion bucks. But if not, an exciting business drama is unfolding-tied up with money as most things are.
Marissa Mayer and David Karp are being interviewed by CNBC moderator Carl Quintanillo right now as the stock rises to 27 dollars, roughly double its price from when Mayer took over.
Karp is the kind of 26 year old whose appeal is more like Justin Bieber’s than Bill Gates’. He knows what to say, describing Tumblr as a “mission” rather than a traditional business. He seems also to know when to shut up, as when he’s asked how much input he’ll have into the non-Tumblr portion of Yahoo.
On the other hand, Mayer is hoarse from the negotiations, but she exudes competence, as she speaks of the growth Yahoo will acquire, the return of profits to shareholders, and the expansion of content demanded by a younger population.
The new fun tone of Yahoo is reflected in the half-comical flash messages on Mayer’s Tumblr page as well. There, you are greeted by two signs, colorful and with fat lettering. “Keep Calm and Carry On,” says one. “Now Panic and Freak Out” is the alternating one.