One of our new summer interns Katie M. weighs in on Yahoo!’s latest acquisition.
It is undeniable that social media has made a huge impact on marketing and advertising. Platforms like Facebook and Twitter, for example, have enabled digital advertising to really take off. One social media site in particular was in the spotlight this weekend: Tumblr. In an enormous business move, Yahoo! approved the acquisition of Tumblr in a staggering $1.1 billion cash deal.
What is fascinating about the deal is what each power player, Tumblr and Yahoo!, could bring to the other. Yahoo! has lately struggled to grab the attention of what All Things D calls the “coveted” 18-to-24-years-old demographic, and Tumblr has yet to rev up its advertising game. Only in the past year has Tumblr begun to use “native” ads that only advertise branded Tumblr pages, which are displayed on Tumbler users’ dashboards. Coincidentally, Yahoo! excels more in advertising and Tumblr has captivated users between 18 and 24. Combining the two could be very prosperous for both.
There are some critics of the deal who say the advertising aspect could be problematic. According to Forbes, Yahoo!’s standard display advertising format contrasts too sharply with Tumblr’s unsuccessful interactive ad industry. Even a Yahoo! News article noted that if Yahoo! wanted to utilize Tumblr’s untapped advertising capability, they would have to ask the permission of each individual blogger on the site. Overriding that policy could earn the scorn of the demographic Tumblr has enjoyed so much traffic from.
Mayer, however, announced to the Tumblr world that Yahoo! did not intend to “screw it up.” She wrote on her own Tumblr page that the two companies will “work together to create advertising opportunities that are seamless and enhance user experience.”
So, who wins the weekend? Perhaps only time will tell who the lucky one in the deal was and what it all means for the advertising world! Let us know what you think about the deal in the comments section!