Did Yahoo pay way, way too much to acquire Tumblr? Likely so. Even Yahoo seems to be admitting that fact, having recently revalued Tumblr downward by $230 million—a pretty clear indication that the company paid a bit too much when it acquired the microblogging platform for more than $1 billion in cash in 2013. Heck, Tumblr wasn’t even even able to make Yahoo’s stated goal of $100 million in revenue for 2015.
“In 2015, we experienced a slower ramp in monetization than we initially expected, and coupled with the sales realignment, the business didn’t deliver that $100 million revenue goal for the year,” said Yahoo CEO Marissa Mayer in the company’s fourth-quarter earnings call earlier this month.
And so begins the pivoting. According to reports, Yahoo is planning to reverse course on one of the bigger internal moves it made when it first acquired Tumblr. Now, Tumblr’s sales team will exist as an independent entity again instead of being mashed together with Yahoo’s sales teams.
“Since the acquisition, Tumblr has introduced a number of innovative ad products to maximize value for our advertisers and best meet their needs. To further support these efforts moving forward, we have returned to a dedicated direct sales team,” a Tumblr spokesperson told Business Insider.
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Given all the turmoil going on at Yahoo right now—with many wondering just what, exactly, the company will look like a year from now, if not a few years from now—it’s possible that Yahoo’s move is an early sign that the company is considering selling off Tumblr at some point. It’s also possible that Yahoo will actually attempt to find a way to better integrate Tumblr into its core operations, especially since Tumblr is one of the three businesses Yahoo plans to focus on in the company’s latest turnaround plan. (Mail and Search are the other two, alongside publishing verticals focusing on news, lifestyle, sports, and finance content.)
“For Tumblr, our priority remains user growth, and we have been pleased with the progress made in engagement, with over 80 percentage of daily users on mobile,” Mayer said on the aforementioned earnings call.
“Moving forward, the team has a solid plan in place, and we continue to believe that Tumblr’s compelling content and attractive demographics will be a significant long-term driver of our overall Mavens and Company growth.”
Date: February 14, 2016