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The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

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Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#51

Post by mani27 »

k_kelly wrote: post #45
mani27 wrote: post #38

The rate at which Yahoo is buying out companies for talent acquiring , I wonder what must be going through minds of engineers at yahoo.

As an outsider it looks like Yahoo is saying it will back big crazy engineering projects if they have potential. To me Yahoo went from being the last place I'd ever want to end up to being an exciting company. It's an amazing turnaround.

Yahoo unlike google doesn't gives that much freedom to engineers to work on their own ideas. Engineers can't make much difference, if same managers who are not doing much now are present. Some major revamp of workforce starting with managers is needed.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#52

Post by sharkweek »

pkmehta wrote: post #47
minimaxir wrote: post #36

Per AllThingsD, "There were no other competing bids, despite reports, to snap up the New York-based hipster blogging service." http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...

Can someone explain to me why you spend $1.1B on this if the company was running out of cash, had investors skittish about funding a new round and there were no competing bids. Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less. What am I mis…

Maybe if they let it die, the service slowly dies too, and then the audience leaves -- Assuming that's kind of what Yahoo is after in the first place; but I'm completely guessing here

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#53

Post by technoslut »

rhizome wrote: post #43
jamescun wrote: post #12

I wonder how this will pan out for Tumblr with Marissa Meyer at the helm. If we look at Flick (bought by yahoo in 2005), it hasn't seen much innovation or new features in the last 8 years and has been mostly coasting. I wonder if this will be the case for Tumblr under Marissa's leadership.

Flickr had a major interface refresh a couple of years ago, and I'm also pretty sure Flickr has lots and lots of paying customers . So, it may have already "panned out," in a "don't mess with success" sense, depending on what that means in the context of Tumblr.

Flickr updated their site a few months ago along with the release with their new iPhone app. It still doesn't feel like a modern site and it doesn't work as well as it should.

Supposedly there is a new Flickr being shown off tomorrow and hopefully Yahoo rebuilt the site from the ground up.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#55

Post by bretpiatt »

pkmehta wrote: post #47
minimaxir wrote: post #36

Per AllThingsD, "There were no other competing bids, despite reports, to snap up the New York-based hipster blogging service." http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...

Can someone explain to me why you spend $1.1B on this if the company was running out of cash, had investors skittish about funding a new round and there were no competing bids. Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less. What am I mis…

All cash does not mean there isn't a portion of it restricted to a time or objective based schedule for key employees (or even all employees and shareholders).

If they intend to continue operating it (highly likely) buying while they are still with cash, all of their staff, and vibrant is quite possibly a better outcome than buying a broken company for less even only a few months later.

Disclosure: I am long Yahoo in my personal portfolio and I've led many M&A activities for Rackspace.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#56

Post by emmelie »

inmygarage wrote: post #10

Thoughts on why this was an all-cash deal as opposed to similar comps (Instagram, YouTube) which were cash/stock mix?

The Yahoo board are saving Tumblr investors and will expect the favor returned down the line. This is boardroom back scratching. Yahoo is being stripped of its cash for the benefit of VC-istan.

Here are the Yahoo board of directors. http://yhoo.client.shareholder.com/directors.cfm

Here are the investors in Tumblr. http://www.crunchbase.com/company/tumblr

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#57

Post by steven2012 »

rgbrenner wrote: post #50
steven2012 wrote: post #37

Earlier quoted context omitted.

This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired. Cash is much more valuable than stock. Any CEO worth their salt would ALWAYS issue stock and never cash, since stock is essentially free (with some GAAP repercussions, but better that then spend cash). But it sounds like tumblr wanted cash instead of cash/stock. It doesn't matter…

"This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired." This is clearly untrue. Which moron CEO at the head of a newspaper anticipates anything more than a very modest increase in their stock over the next few years? Most newspapers are very much aware of their problems. Do you think a CEOs job is to bury their head in the sand and…

A CEO's job is to increase shareholder value. End of story.

This means increasing the stock price. So yes, I do believe that this statement is absolutely true. The CEO needs to figure out a way to increase shareholder value, whether they are Yahoo, or Washington Post, or New York Times, or Groupon. They are not supposed to sit around and maintain dividends. Whether it's breaking into new businesses, selling their current underperforming businesses, etc, that is why they are CEO, to think of new ways to make money and increase stock price. Not to sit on their laurels and collect their paycheck.

3 years is MORE than enough time for any CEO to execute a strategy that increases shareholder value. If they can't, then they should be fired.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#58

Post by arindone »

kmfrk wrote: post #26
jamescun wrote: post #12

I wonder how this will pan out for Tumblr with Marissa Meyer at the helm. If we look at Flick (bought by yahoo in 2005), it hasn't seen much innovation or new features in the last 8 years and has been mostly coasting. I wonder if this will be the case for Tumblr under Marissa's leadership.

I share your reservations, but has Tumblr really been going anywhere the last couple of years? It's a little like Flickr in how it's calcified in development, but is still a solid product, nevertheless, albeit one that feels a bit stale.

Tumblr really has blown up in terms of users and content created (anecdotal evidence from some folks I know that used to intern there) -- however their issue is they waited too long to figure out how to monetize. And to be honest the formula for monetizing requires experimentation and iteration.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#59

Post by rhizome »

technoslut wrote: post #53
rhizome wrote: post #43

Earlier quoted context omitted.

Flickr had a major interface refresh a couple of years ago, and I'm also pretty sure Flickr has lots and lots of paying customers . So, it may have already "panned out," in a "don't mess with success" sense, depending on what that means in the context of Tumblr.

Flickr updated their site a few months ago along with the release with their new iPhone app. It still doesn't feel like a modern site and it doesn't work as well as it should. Supposedly there is a new Flickr being shown off tomorrow and hopefully Yahoo rebuilt the site from the ground up.

Yeah, the overall UX has needed updating for quite some time, but I also imagine their paying customers (photo nuts) are some of the pickier users out there. I wouldn't be surprised if the best course for Flickr is to be as conservative with changes as possible.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#60

Post by emmelie »

steven2012 wrote: post #37
keiferski wrote: post #22

Earlier quoted context omitted.

My best guesses: 1. Yahoo would rather spend cash than stock (possibly because they anticipate Yahoo stock going up in the future). If Yahoo thinks that $1 in stock today will be worth $2 in 3 years , it might make more sense to spend cash. This is a huge gamble, of course. 2. Cash is intrinsically more valuable than stock; in other words $1 cash != $1 stock. Yahoo may feel more comfortable spending $1 Billion cash t…

This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired. Cash is much more valuable than stock. Any CEO worth their salt would ALWAYS issue stock and never cash, since stock is essentially free (with some GAAP repercussions, but better that then spend cash). But it sounds like tumblr wanted cash instead of cash/stock. It doesn't matter…

Mayer and the boad of directors aren't stupid - they saw an opportunity to further their own careers in the long run. The Tumblr investors now owe them a favor. This is boardroom back scratching.
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