So a truly enormous ’nuff respec’ (as I believe the young people would have it) to David Karp (who’s making ‘Koi’ jokes now, eh?) for getting Yahoo to pay a truly staggering £750m for his web creation, Tumblr. Yes, I realise that, in the great scheme of it all, when Glencore and Xstrata are talked about in hushed £76bn tones, that £750m is loose change, but – d’you see – here’s the thing – Tumblr, with all its 102 million blogs and 44.6 billion posts, doesn’t actually make any money.
In the aftermath of the Yahoo acquisition announcement, one analyst actually said that it was hard to see how it would (despite being data rich and capable of providing loads of information about its, mostly young, users). I thought that was a bit naughty of said analyst – mostly, they hold their tongues on this topic, at least until the smoke has cleared, for fear that it will all unravel. As well it might because, and maybe it’s just me, the way you’d normally value a company is on a multiple of its earnings. And if it doesn’t earn anything, well – you do the math. Or not. Because, of course, there isn’t any math to do.
In the meantime, while we’re pondering how nothing can be worth hundreds of millions of dollars, and Mr Karp is sitting in his bare garret in wherever it is (‘I don’t own any books’ he said – go figure) counting his couple of hundred million dollars and – apparently – not wondering what to spend it on (am I alone in finding it deeply sad and slightly suspect that a 26-year old with $200m, even if he is called Karp, is not, for example, buying a swimming pool and filling it full of Puligny Montrachet and inviting his girlfriend to ‘come on in, the white Burgundy’s lovely’?) the users of Tumblr are bemoaning the site’s apparently inevitable fate.
“A white-hot poker into the woodwork” was one such comment, although Tumblr and Yahoo are not, of course, made of wood, and even if they were, a white hot poker is not something you’d necessarily plunge into the woodwork, a chainsaw being that much more effective when dealing with woodwork, but you have to admire the sentiment as you do the simpler ‘Tumblr’s going to suck’. But how do they know? From what I know of Tumblr, I think it’s pretty ‘sucky’ (is that a word?) already.
I do note that Yahoo are talking about ‘light touch advertising’ – which doesn’t sound good – but I’m at a loss in trying to understand why – with 300 million unique users, people somehow think of Tumblr as being independent and in a way ‘theirs’. It’s not. It’s a commercial concern – or Yahoo would like it to be – and just because Big Purple has bought it, does not mean it is going to change significantly. They’ve promised that Fish Boy will remain CEO and his team will continue to run the business – this, also, does not mean that it is going to stay significantly the same. If you see what I mean.
Oh – and to my great joy, at least one pundit left the word ‘social’ out of his descriptor, referring to Tumblr simply as ‘media’. Or maybe it was a typo.