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Yahoo doesn't seem to do too well with its acquisitions. The startups seem to shut down or flatline.

Tumblr is hip and all but what makes it that valuable? is there something I am missing?

Pageviews. Lots of them.

Of course, Tumblr has no revenue, but when has that ever mattered in acquisitions? :)

It'd make a h*ll of a lot more sense than the summly acq. Hopefully the core tech tumblr uses isn't just a 3rd party.
I'm wondering if this goes through, what could do to the start up ecosystem in NYC (assuming freshly minted devs won't want to twiddle their thumbs for too long)?
But are there really a lot of pageviews? Not from the site owners'point of view. On my Tumblr, I've had posts that get thousands of "likes" and reblogs, yet the Google Analytics counter reads maybe a 100 pageviews in that time period. This is of course because my posts were engaged by users on the dashboard.

The upshot of the dashboard dynamic is that users, at least in my case, dont have much of an incentive to create beautiful permanent sites...just like i dont generally care what my Twitter profile page looks like. The dashboard dynamic also affects the content I put out...I haven't done a scientific analysis, but I would wager that my vertically oriented photos are almost always "liked" more than my landscape-oriented photos...not because they are better, but because vertical photos dominate the dashboard screen area.

And so unless the dashboard is a gold mine of ad revenue, it's hard to see how this will improve Yahoo's bottom line without some extremely clever engineering and design...but not only that, Tumblr's social interaction model is not as addictive as it is on Twitter and Gacebook...less interactions means less data.

This isn't a knock on the Tumblr team...I would love it if they're able to continue the service with a big pocketed owner...the service really changed the way I think about blogging and content workflow...so props to them for making a beloved product

>but not only that, Tumblr's social interaction model is not as addictive as it is on Twitter and Gacebook...less interactions means less data.

I think the tags people use on their posts could go a long way to serving relevant ad content in dashboard or outside of it. Also from looking around on some blogs on tumblr,I see that people seem to mostly focus on a core group of topics they're generally interested which I can see going a long way with serving relevant ads.

Engineering wise, since blogs are so customizable that may have some challenges, but I can see an automatic "ad-injector" take the same format as the posts on a persons feed (that can't be edited in the style editor), and insert itself (based on w/e factors such as how many posts, page views, type of content,etc). From talking with a recruiter last summer, that may be something much more fun for devs to tackle than trying to redo their backend.

Tumblr is getting old in Startup Years and they've started pushing more "Sign up now!" floaters in your face which means they're getting desperate for metrics to improve so they can look more attractive to investors and/or acquirers.

They can either fight to become a Grown Up Company or they can take the easy way out and liquidate their built up equity in Internet Zeitgeist Funbucks (which apparently is exchangeable into USD by Yahoo).

Tumblr has been around for over six years and it's getting to the point where if you're asking what's the big deal about Tumblr then you might just be getting too long in the tooth.

Tumblr is interactive MTV for a generation of web addicted kids and Yahoo's DNA is a media company.

Tumblr is a new media company with roots in New York's media and advertising scene. They recently opened a Santa Monica office to further shore up business relationships with Los Angeles' media scene.

If they can build that out within a year and setup profitable relationships, paired with a loyal following, they can ride out the native marketing wave and command a hefty price tag so David Karp can keep doing the oh-so-twee-unconventional-hipster things that he does.

If Marissa Mayer is as legit as everyone claims her to be she gets this. There's only two more missing pieces left for what she needs to do to make Yahoo relevant again.

1. Expect a deal with an enemy of an enemy who is therefore her BFF.

2. Expect more thought leadership around one big concept for the third wave of internet adoption.

So, opportunity to add advertisements?
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Shut down all the things