Yahoo!, which has effectively stored my spam e-mails for almost a decade, announced today that it will purchase Tumblr, a blogging service I don’t use (not a shock given how dated a reference the headline of this blog post is).
The combination of Yahoo and Tumblr creates an online powerhouse with roughly one billion users, which will draw in more advertisers and help Yahoo keep visitors on its properties for longer periods of time, (Marissa) Mayer told Reuters in an interview.
Sounds like the sort of great idea a high-powered CEO such as Mayer would have.
Analysts say Yahoo appeared to be overpaying for a business that has never posted a profit, makes a fraction of Yahoo’s sales, and may not contribute significantly to revenue for years.
“Even if revenue was $100 million, it means Yahoo paid 10 times revenue,” said BGC Financial analyst Colin Gillis. “Ten times is what you pay to date the belle of the ball. It’s on the outer bands of M&A.”
Actually, if you’re paying anything to date the “belle of the ball,” she’s actually a prostitute… of the ball.
One question Yahoo may have to address is Tumblr’s reputation as a home for pornographic blogs. At one point in 2009, about 80 percent of Tumblr’s top sites had something to do with adult content. Today that number is closer to 5 percent, according to Quantcast data, but the old image lingers.
Yahoo! can clean up Tumblr all it wants, just so long as it remains the ideal source for information about former Doctor Who star David Tennant’s hair.