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Tumblr deal sparks talk on next big tech target
by Staff Writers
New York (AFP) May 20, 2013


Yahoo unveils makeover of Flickr site
New York (AFP) May 20, 2013 - Reinvigorated technology player Yahoo! Monday unveiled a dusted-off design of its Flickr photo platform only hours after the company's dramatic acquisition of blogging site Tumblr.

Yahoo chief executive Marissa Mayer, maintaining that her ambition was to make Flickr "awesome again," said the new site will showcase "bigger images" and create a user experience that is "more immersive, more expressive."

Mayer's announcement of the Flickr makeover came only hours after the company announced it was buying Tumblr for $1.1 billion. Referring to Tumblr, Yahoo promised "not to screw it up."

Mayer, a Google veteran who joined Yahoo as chief executive last summer, Monday referred to Flickr as a once-shining acquisition "that didn't fare so well" and vowed that Tumblr would not follow a similar path.

Mayer described Monday's dual announcements as consistent with her ambition to make Yahoo an "Internet services company" that focuses on "improving user experience."

Some analysts have criticized the $1.1 billion Tumblr deal as overpriced given that the company has a scant $13 million in revenues and no profits.

But Mayer said that Tumblr's users of some 300 million per month complements Yahoo's 700 million per month, making a total of some 1 billion users per month, a huge set of eyes that will appeal to advertisers.

The remade Flickr aspires to transform a consumer experience that had become flat with excessive text and dull, uninspired photos.

Under the new Flickr, photos upload in full resolution and adapt "wherever" users desire, such as smartphones, tablets or social networks such as Facebook and Twitter, said Yahoo senior vice president Adam Cahan.

The showcase element is a free terabyte of space to store photos; enough capacity to store up to 537,731 images, Cahan said. That is more space that any user could possibly fill in a lifetime, Yahoo officials said.

"We wanted it to be unlimited," Cahan said.

The revamped website, which went live Monday evening, also has a new look, cutting out words and user messages and instead featuring larger photos without text set against a sleek black background.

Mayer said Flickr's current subscription pool is in the "tens of millions." She declined to release the company's targets for growing subscriptions.

Mayer said Yahoo benefits from a "really healthy" revenue stream, largely from advertising.

The new Flickr will employ new advertising formats that Yahoo! is still developing. Users who want to opt out of advertising can pay $49.95 a year to access an ad-free version of Flickr.

Mayer said she has four more product launches scheduled for the coming weeks.

She boasted that the recent stream of activity has increased the "velocity" within Yahoo, which has been viewed by some as a fallen technology star following the rise of Google and some other companies.

Mayer, who was joined by New York Mayor Michael Bloomberg, also announced that Yahoo had settled on a New York City headquarters. It will be in the former New York Times building in Times Square.

"Twenty years ago if you looked out here you'd see plenty of yahoos, but now the Yahoos will make an honest living and help us grow," Bloomberg said in a joking reference to the area's seedy past.

Bloomberg said that the moves show the city has become "a big player" in the technology world.

The billion-dollar deal for Tumblr has stirred talk on the next big acquisition target in the sector, with cash-rich tech giants looking for the next potential star.

Yahoo!'s blockbuster deal for the popular blogging platform comes amid a battle for eyeballs on the Internet among big tech firms such as Facebook, Google, Amazon and Apple.

"All the big internet companies that have money are potential buyers," said Michael Pachter, analyst at Wedbush Securities.

"Then it depends on what they want to be and how much they are willing to pay."

Each of these firms is trying to get more users into their ecosystem to be able to gather data and "monetize" their user base, mainly by targeting them with ads tailored to their usage patterns, analysts say.

Yahoo! is believed to have outmaneuvered Facebook and Microsoft to get Tumblr, as the major tech giants look past the static Internet boxes to "streams" of content.

"We're all shifting our attention to mobile devices, and we've adopted the 'stream' as our preferred method of content discovery and consumption," says John Battelle, an entrepreneur who founded Wired and Federated Media Publishing.

"Yahoo! is already shifting its home page and other content sections to a stream like interface... And Tumblr was built from the ground up as an activity stream."

The price tag paid by Yahoo! means "the bar now has been set high in terms of valuation," said Allen Weiner at the research firm Gartner.

"It raises the question of what is a company like Twitter is worth."

Perhaps the most prominent of the social media startups to remain private, Twitter "has yet to show an inclination to go public," said Weiner, and it remains unclear whether Twitter will remain independent or be acquired.

Pinterest, which allows users to decorate virtual bulletin boards with pictures showcasing interests in anything from food to sports, fashion or travel, is clearly one of the new companies expected to be a target.

Weiner said, however, that Pinterest, seen last year as one of the rising starts in social media, "has not evolved quickly enough."

"The ability to replicate the idea is pretty easy," he said. "That said, I think someone will probably buy them."

Trip Chowdhry at Global Equities Research said the hefty price for Tumblr could discourage buyouts, because the return on the investment is less clear.

"You may have engagement (at new social media sites) but maybe not the possibility to grab ad dollars," he said.

"I just wonder if the acquisition that we see prices a lot of companies out of the market."

Several other startups are likely still being courted, but the landscape has shifted in recent weeks, say analysts.

Dailymotion, the popular video-sharing site, was among those, but the French government's move to block Yahoo!'s acquisition probably dampened enthusiasm for the unit of France Telecom.

That leaves Hulu, which is trying to catch Netflix in the streaming video space. Some reports suggested that Yahoo!, Amazon and others could be interested.

Foursquare, the location-based social media app, "was a prime target two years ago, I don't think as much today," said Weiner, because it is "struggling to monetize" its platform.

Shazam, an application allowing users to find music, is "interesting," Weiner said, making it a possible target for a hardware maker.

Weiner said that "my favorite company to be acquired" is now Storify, a social network which allows users to create stories or timelines using social media.

"It is just in the right place at the right time," he said, and could generate interest from companies like Google, Yahoo! or Facebook.

"It all depends on the price," he said.

Tumblr fans get sassy on Yahoo! takeover news
San Francisco (AFP) May 20, 2013 - Tumblr lovers were quick to express ire in trademark sassy posts Monday after news that Yahoo! is buying the blogging platform in a $1.1 billion deal.

Reaction was swift as the youthful user base of Tumblr put the California company on notice that they would hold it to the promise of allowing the New York firm to remain independent.

One Tumblr user posted an endlessly looping vide snippet of pop singer Britney Spears repeatedly saying "I'm sad" while another uploaded a picture of a man vomiting in front of a large Yahoo! sign in a hallway.

A petition titled "Stop Yahoo! from buying Tumblr" at website ipetitions.com topped 168,000 online signatures by midday.

"Here we were in a land of great promise, pain, and porn," wrote a Tumblr user with the screen name "50shadesofitsadamnshame."

"I feel like our land is going to go from land of the free and home of the fangirls/boys to oppression and censorship."

The post and others expressed fear that Yahoo! would clamp down on content in an effort to make Tumblr more family friendly.

"You are now Yahoo!'s damn bitches," the poster contended.

Along with imaginative and unfettered social or political satire, Tumblr is known for its troves of adult content. Many wondered what being taken over by Yahoo! would mean to how Tumblr handled porn.

"Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business," Yahoo! said in announcing the acquisition.

"The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators."

A Tumblr user responded by posting an animated cartoon that showed cartoon character Homer Simpson wearing a sandwich board sign bearing the message "The end is near" as he strode repeatedly past a Yahoo! logo altered to feature a giant "T."

Some questioned how successful aging Yahoo! would be in making itself more attractive to young Internet users by taking over Tumblr.

Mat Mullenweg of blog hosting service WordPress.com said in an online message that there was a huge spike in imports of posts after rumors of Yahoo! buying Tumblr broke on Sunday.

"Some people are reading too much into the import numbers," Mullenweg said in an update to his blog post. "I don't think there will be an exodus from Tumblr."

Tumblr user "godoftheinternet" called for calm, reasoning that features at the service would improve thanks to Yahoo! resources like massive datacenters for server power.

"Tumblr's still Tumblr, it just has a new owner," the user maintained.

"That doesn't mean David Karp is a sell-out or any less of the creator," the post continued with a reference to Tumblr chief executive and co-founder Karp.

"But yeah, I'd get tired of millions of 12 year old white girls calling me daddy all the time too."

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