Gadgetory

hello and welcome to inside scoop I'm sumedh us and joining me is Dan Farber he's an editor for Cena damn thanks for being with us my pleasure so yahoo has gone shopping they've bought tumblr for the cool price of 1.1 billion dollars why did Yahoo decide to make this purchase well it's actually a good fit for both yahoo is a company that's you know seeking to revive its brand it's older it was a pioneer on the web but has since fallen on harder times marissa meyer has come in as CEO over the last year she's bought ten little companies and mostly for engineering talent but now she's actually buying eyeballs which is to say tumblr has about 300 million visitors per month 24 billion minutes are spent on that site every month and it has about 108 million blogs add that all up it's a lot of content it's a lot of users and most importantly it's a lot of young people who are very mobile clearly this has to be valuable in meijer is because otherwise why would you pay 1.1 billion dollars in a mostly cash deal from what I understand well it's it's it's valuable over the long term potentially and it's kind of more along the lines of what Meyer who is at Google what Google has done with with YouTube which now generates about 4 billion dollars in revenue so over time they hope to scale it up and go from you know a hundred million blogs to a billion blogs or whatever it might be but most importantly they need to monetize it right now as of last year the tumblr did about thirteen million dollars they say they're going to do closer to a hundred million this year but it's still a kind of drop in the bucket for a company that does five six billion dollars there's been a promise from meijer that they're not going to quote unquote screw it up because there are some very avid and ardent tumblr users out there still we've heard reports of people defecting over the weekend to tumblr competitors basically what is the sort of reassurance going to get them the promise of not screwing it up I mean do you think in reality that the service will remain unchanged for the short term they've made a promise Myers made a promise to David Karp who is the founder and CEO of tumblr which which is a six year old company compared to Yahoo's 18 years that they will leave them alone they will be run independently that Yahoo will help out on on personalization and infrastructure and monetization but they're free to continue to do what they've been doing over these last several years over time you you would expect that there would be much more integration the thing that wasn't mentioned and this was rather curious is that tumblr is a social network right it has followers and and people follow each other there was no mention of that there were no numbers about that it could be that they just don't want any comparisons to Facebook or Twitter but it may be over time that tumblr provides a backbone for face before for Yahoo to have its own social network so that is one of the ways that it could be integrated into yahoo services in overtime well it will primarily be integrated through search when you search on yahoo weather on the web or yahoo site search you'll see tumblr results as well as through personalization for example if you are searching on something on fashion well Yahoo's not really great on fashion content tumblr is so they would be able to understand your profile and if you're interested in fashion bring up some tumblr results when you're searching on yahoo or in your personal news feed the changes that tumblr users can expect to see you know you said that over the short term there probably wouldn't be any but there's a major one that probably a lot of users are concerned about and that's advertising what do we know about how advertising may play a bigger role on tumblr because of this acquisition well it's I think it's very important for yahoo to to make some money from a safe position but they have to do without alienating the tumblr users tumblr has already been involved in what's called native advertising which is advertisements that look like a blog on tumblr but they say they're sponsored and they're in the new flow of what people are reading I think that Yahoo is going to continue that and accelerate it and perhaps to other kinds of brand advertising and display advertising but as Meyer likes to say they're going to do it in a tasteful way all right well she's a tasteful woman at least in her appearance so hopefully that's true dan farber thank you so much for inside scoop im sue me does thanks for watching