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Yahoo's Tumblr, Google's Makani and Noah Cross's Future

Designing software, wings and your life

There is absolutely nothing wrong with that in and of itself. Young people are, after all, young and they have a culture that reflects that time of life and the way our society treats it. In a world where young people are constantly being chased and chastised, a welcoming Internet place for them is a great thing. But a company like Yahoo doesn't spend $1.3 billion for something because young people need it. It's got to yield a profit and that's the issue the tech media can't figure out.

Groping for some logic, some writers speculated that Tumblr's fairly loyal user base may give Yahoo some new options. It can link Tumblr to its many services, build advertising revenue and make a stride toward "cornering" a lucrative demographic. Meyer herself stressed these possibilities in her "media conference call" -- one of those "invitation only" events executives use to bless certain media as "important". She explained that, while Yahoo intends to leave Tumblr's functionality (and its management team) intact, there are lots of "cross-over opportunities" like charging more for a Yahoo ad that's also displayed on Tumblr.

In polite terms, that's highly questionable. Although Tumblr is brilliant technologically, it doesn't come close to making enough to cover the huge investment Yahoo has made; its design doesn't allow room for much advertising. What's more, Tumblr users don't spend much money because, at this life stage (and in these times), they don't have that much to spend. Finally, although having a Facebook-like offering is good for Yahoo, Tumblr has about 10 percent of the users Facebook has. So Meyer is saying that she intends to cover her purchase by offering advertising from a site that doesn't have room for it, catering to a demographic that doesn't spend much money and linking Yahoo's services to a Social Networking site that is a small compared to the leading sites of that type.

That nonsense led some analysts to question whether Meyer has gobbled too gluttonishly. After all, they reason, Yahoo's history is littered with remarkably dumb acquisitions whose history is written in red ink. It spent $3.6 billion to purchase Geocities, the first service to let people develop and maintain their own website for free, just as web technology caught up, surpassed and buried it. It made a $5.7 billion investment in, a start-up on-line radio system that never really started up. The list of goofs is long, expensive and humiliating. It's one reason why Yahoo hired Meyer and that's the problem with the suspicions that she goofed. Meyer was hired because she doesn't.

She definitely has a plan. It may not be one of those plans corporate executives announce to share-holders with very specific goals and carefully measured "outcomes". Meyer doesn't think that way. She believes a successful technology company finds a way to lock onto a market and then follows that market through its life, changing technologies being offered and carefully managing its customers' use of Internet technology.

story | by Dr. Radut