Unless you’ve been living in a digital vacuum, there’s no doubt you’ve noticed Yahoo! CEO Marissa Mayer’s recent acquisition shopping spree. Since starting with the troubled tech giant in July 2012, Mayer has snapped up 16 companies in total, six of those in the month of May alone. From Tumblr to Summly, keeping track of the ever-expanding Yahoo! family is enough to make your head spin. Here’s an overview to get you up to speed.
Yahoo!’s biggest acquisition by far was that of beloved blogging platform Tumblr, which was purchased for $1.1 billion in cash. The Yahoo!-Tumblr partnership will aim to mend a huge pain point for Yahoo!: Connecting with a younger, social, and digital-savvy demographic. “Tumblr’s tremendous popularity and engagement among creators, curators and audiences of all ages brings a significant new community of users to the Yahoo! network,” Mayer said in an announcement on her own Tumblr. “The combination of Tumblr+Yahoo! could grow Yahoo!’s audience by 50% to more than a billion monthly visitors, and could grow traffic by approximately 20%.” Suspecting that the acquisition may not go over well with Tumblr’s devoted users, Mayer also said, “We promise not to screw it up.” For Mayer, Tumblr is a huge piece in her three-step plan to revive Yahoo! and attempt to lure in leading tech talent once again:
- Innovate and develop Yahoo!’s own product offerings
- Increase user engagement
- Pull in more advertising from lucrative partners
But Tumblr isn’t the only purchase Mayer hopes will give Yahoo! a much-needed facelift. In just one year, Mayer has bought out startups including Stamped, Snip.It, Alike, OntheAir, Jybe, Alike, Summly, GoPollGo, Astrid, Milewise, PlayerScale, Loki, Rondee, GhostBird, and the just-confirmed Bignoggins Productions. Mayer is also reportedly in discussions to purchase video sharing app Qwiki and contact app Xobni and, until withdrawing on June 28, she was involved in a bidding war for mega-popular video platform Hulu.
So, how will Mayer and Yahoo! utilize all of these acquisitions? Most fall on the acqui-hire side of the spectrum, meaning Mayer has more interest in the caliber of staff at the purchased company than the company itself. However, some, like Tumblr, are more multi-faceted than that. “In terms of working together, Tumblr can deploy Yahoo!’s personalization technology and search infrastructure to help its users discover creators, bloggers, and content they’ll love. In turn, Tumblr brings 50 billion blog posts… to Yahoo!’s media network and search experiences. The two companies will also work together to create advertising opportunities that are seamless and enhance user experience,” Mayer also said on her Tumblr post. Tumblr resonates with all three steps of Mayer’s plan, including yes, advertising. Mayer confirmed to Yahoo! investors that she plans on working “Ad units (that are) very native and… follow the form and function of Tumblr” into the platform, and is also considering premium placements and an exchange system similar to Facebook’s. Although Tumblr CEO David Karp is traditionally quite against advertising, Mayer seems to have convinced him otherwise. “David talks wistfully about the ads that made him want to see a movie or want to buy a car as a child,” Mayer told investors. “He wants [digital] ads to really create that aspirational feeling. We really want that on the online atmosphere.”
With 2013 barely halfway over, there’s no telling what else the year has in store for Yahoo! and its determined CEO. Do you think Tumblr and the roster of startups will satiate Mayer’s buying binge, or are other acquisitions on the horizon?
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Neal, Ryan W. “Yahoo Purchases Rondee and GhostBird: Will Marissa Mayer’s Spending Spree Ever Yield Profits?” ibtimes.com. N.p., 13 June 2013. Web. 2 July 2013.
“Yahoo buys Bignoggins for more bright ideas.” usatoday.com. N.p., July. Web. 1 July 2013.
“Yahoo said looking to buy Xobni, Qwiki.” bizjournals.com. N.p., 18 June 2013. Web. 2 July 2013.
Yarow, Jay. “Apparently, Yahoo Has Dropped Out Of The $1 Billion Bidding War For Hulu.” businessinsider.com. N.p., 28 June 2013. Web. 2 July 2013.