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The $3B+ Exit Tumblr Could Have Had

daniellemorrill.com

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Re: The $3B+ Exit Tumblr Could Have Had

#21

Post by aresant »

dmor wrote: post #13
aresant wrote: post #12

Earlier quoted context omitted.

That CPM struck me as crazy high too and tumblr content is much closer to "social" than it is to premium media which would put the CPM a lot closer to $0.50 - 1.00 at scale. Recent break out of CPM by country for FB : http://www.rudibedy.com/blog/facebook-advertising-cpc-cpm-pe...

I should probably point out I am talking about Revenue per Impression, what the publisher earns. The advertiser may pay $.50 - $1 CPM to be shown on the impression, but it is possible for the publisher to show multiple ad units on the same impression. This analysis touches on the actual value of the dashboard today, but is ultimately focused on the expected value and potential revenue opportunity long term. I thought…

Fair point but 3 - 5x ad units @ $0.50 - 1 still don't add up to $10 - 20 . . .

Re: The $3B+ Exit Tumblr Could Have Had

#22

Post by uladzislau »

I think the potential Tumblr acquisition offer is based on userbase/audience value rather than any kind of (current) monetization.

It seems Yahoo is trying to extend their reach in the active/young people market. Tumblr audience is a perfect fit for this strategy and sure Yahoo is ready to pay premium as there are not many comparable platforms available for acquisition.

Re: The $3B+ Exit Tumblr Could Have Had

#23

Post by pod4369 »

"According to Forbes Tumblr is targeting $100M revenue in 2013 but, according to sources I spoke to who are familiar with the company, actual Q1 revenue growth was flat and Tumblr is on track to do only $15M in revenue this year."

This is unbelievable. I can't believe they're running out of the $85M so soon after raising it, and have basically nothing to show for it. I'd be pretty outraged if I were an investor.

Re: The $3B+ Exit Tumblr Could Have Had

#24

Post by jcampbell1 »

useflyer wrote: post #7

There are a two major faults with the author's analysis which lead me to believe this post should not be relied on. 1. Advertising rates are far below the author's $10-20 CPM estimate for dashboard advertising; $10-20 is for legitimately premium advertising such as high-end audiences, wrapping a website, etc. Dashboard / banner ads will fetch $0.5-3 CPM the way Tumblr is running them. 2. The "valuation" formula of 10…

> 1. Advertising rates are far below the author's $10-20 CPM

I agree with your analysis, but don't confuse CPM with RPM. Publishers can run 1-20 ad units, so the price you pay as an advertiser (CPM) can be an order of magnitude different from what the publisher receives (RPM).

At any rate, I can't fault the author too much. It is an extremely well researched piece that I am glad I read. It would have been slightly better if he started with the $15M revenue run rate, and then backed into the business model.

Re: The $3B+ Exit Tumblr Could Have Had

#25

Post by pg »

pkmehta wrote: post #20
dmor wrote: post #16

Earlier quoted context omitted.

HuffPo, and I said it was steep not what people should expect to get. Huffington Post, a media company, was purchased by AOL for $315M @ $30M rev. That's 10x. Stop trolling.

You could goto Bloomberg.com or Yahoo Finance and get real P/S ratios but you used the uncontested paragon of financial data - HuffPo. And you said it's high but still used it in your headline cuz you thought would have a higher chance of getting to the top of HN. I guess pursuit of provocative > properly researched.

Will you both please stop?

Re: The $3B+ Exit Tumblr Could Have Had

#26

Post by hkmurakami »

goronbjorn wrote: post #19
hkmurakami wrote: post #10

Earlier quoted context omitted.

Also, mobile-based photosharing was deemed a "major threat" to Facebook's existence and relevance, whereas Tumblr is a much less mobile-centric and is deemed more of an "asset acquisition" and doesn't carry the urgency that Instagram carried for FB.

I would argue that, in this case, long term irrelevance is a "major threat" to Yahoo!'s existence, and this is one of few ways to circumvent that. There's going to be the same seemingly irrational price pinned on this acquisition because it's a long term life or death situation.

Sure, but "Tumblr" is not an existential threat to Yahoo!. That kind of dynamic where you're such a pain in the ass to some big company that they have to buy you to maintain their status quo business as usual is one of the best ways to get acquired.

When you don't have that dynamic, Yahoo! doesn't have to buy Tumblr. Maybe they have to buy something but it doesn't have to be Tumblr and it doesn't have to be now, right this moment.

Re: The $3B+ Exit Tumblr Could Have Had

#27

Post by stanleydrew »

jcampbell1 wrote: post #24
useflyer wrote: post #7

There are a two major faults with the author's analysis which lead me to believe this post should not be relied on. 1. Advertising rates are far below the author's $10-20 CPM estimate for dashboard advertising; $10-20 is for legitimately premium advertising such as high-end audiences, wrapping a website, etc. Dashboard / banner ads will fetch $0.5-3 CPM the way Tumblr is running them. 2. The "valuation" formula of 10…

> 1. Advertising rates are far below the author's $10-20 CPM I agree with your analysis, but don't confuse CPM with RPM. Publishers can run 1-20 ad units, so the price you pay as an advertiser (CPM) can be an order of magnitude different from what the publisher receives (RPM). At any rate, I can't fault the author too much. It is an extremely well researched piece that I am glad I read. It would have been slightly be…

Danielle Morrill is a she not a he.

Re: The $3B+ Exit Tumblr Could Have Had

#28

Post by BuddhaSource »

nwh wrote: post #11
goronbjorn wrote: post #8

> In the end Tumblr won’t see a bigger exit because they didn’t prove they could monetize their massive traffic before time (and money) ran out. Instagram had $0 in revenue when they were acquired for $1 billion in cash/stock. The price paid in that instance was for potential , and it's likely to be the same in the case of Tumblr.

We should probably avoid using Instagram in examples. It's such an insane outlier that it doesn't make sense to compare anything to it.

Tumblr is very similar to Instagram and should be considered as example.

The overlap between Instagram and Tumblr users in the early days is huge. Both are targeted at young crowd with similar taste graph.

As a Platform Tumblr has great potential in spreading the content. Reblogs works just like retweet and a good content can potentially go viral. That also includes rebloging of promotional content.

I personally feel people who don't use Tumblr see this as yet another blog site. They have the best mobile app to post pics, stories, videos & even audio. After Instagram, I am slowly getting addicted to Tumblr's mobile app.

Re: The $3B+ Exit Tumblr Could Have Had

#30

Post by dragondilesh »

uladzislau wrote: post #22

I think the potential Tumblr acquisition offer is based on userbase/audience value rather than any kind of (current) monetization. It seems Yahoo is trying to extend their reach in the active/young people market. Tumblr audience is a perfect fit for this strategy and sure Yahoo is ready to pay premium as there are not many comparable platforms available for acquisition.

The problem with active/young people market is they are very temperamental to ads, if you don't treat your user base like the tumblr founders have, they would have easily changed to another platform with less ads. Sure if yahoo acquires tumblr they gain direct access to this marketbase but if they tarish what tumblr is now, with a bad ad revenue scheme they will very easily lose that market base to something else.
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