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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

#71

Post by alan_cx »

diego wrote: post #66
pkmehta wrote: post #47

Earlier quoted context omitted.

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…

If you and Marissa Mayer want the last burger in the world, how much is it worth? What if you're Mark Zuckerberg, and it's really important to her that you don't get a taste of that burger? Maybe she doesn't even like burgers. Factors like the cost of the burger, or how fresh/tasty it is, become less important. Also, all-cash doesn't mean what you think it means. The currency used to pay for a company (cash, stock, p…

Well, if you are British, you'd want to check that burger doesn't contain horse meat.

And as amusing as that might or might not be, there is also a point there.

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

#72

Post by riggins »

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…

Cash is much more valuable than stock.

this claim is indefensible. It depends on the valuation of the company. For example, at IPO MSFT had 25M shares outstanding @ $21, total market cap of $525M. Obviously 5M shares of MSFT stock (market value of $100M) in 1986 was worth far more than $100M of cash.

On the flip side, $100M in cash would have been worth more than $100M in Groupon stock (at the IPO valuation).

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

#73

Post by antiterra »

rhizome wrote: post #59
technoslut wrote: post #53

Earlier quoted context omitted.

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.

Even if it's the best course, it might still wreck on the coral reef cruft of dead accounts and abandoned groups. Flickr has been in decline for a while. I doubt incremental changes could bring it back.

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

#74

Post by _ak »

LinaLauneBaer wrote: post #31
_ak wrote: post #23

Earlier quoted context omitted.

Has any internet petition ever worked?

Yes. It more or less saved Germany from internet censorship. http://www.netzturbine.de/en/internet/zensursula-deutsches-i...

I was actually thinking about petitions about private companies and their business decisions, not politics. If Tumblr or a Yahoo had their own corporate petition platform, then yes, but comparing a petition on some random website with a petition on the website of the German Bundestag is like comparing apples to orangutans.

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

#75

Post by [deleted] »

steven2012 wrote: post #57
rgbrenner wrote: post #50

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." 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 cur…

[deleted]

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

#76

Post by gnok »

zaidf wrote: post #63

This makes it pretty simple to judge Marissa Mayer's performance at least in the next year. If Tumblr shows any sign of failure, its pretty much equivalent of Marissa Mayer failing at Yahoo. If tumblr shows signs of progress not seen Pre-acquisition, it's a sign of an ex-Googler making a smart acquisition AND making it succeed in the long run. Google is the best company when it comes to making large acquisitions work…

I disagree. We don't know what Yahoo wants to do with Tumblr. All we have are rumors, a WSJ report and tons of idle speculation. Without knowing what the intended end game is, I don't see how we can call the acquisition a "success" or "failure", much less the CEO's. I also don't agree that "a sign of progress" is "making it succeed in the long run".

Google is no genius with large acquisitions either. Motorola and Blogger come to mind immediately, but there are others too.

I think we can all agree that Yahoo has been mismanaged at least until recently. I just don't think a CEO's performance is a boolean value that depends on an undefined "any sign of failure" on a large acquisition with a 1 year time frame.

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

#78

Post by jusben1369 »

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…

One must never look at this deal based on the acquired's metrics and dynamics. One must look at this based on the impact of the acquirer. Instagram was worth $1 billion as it was potentially a $10 billion reduction in FB's valuation at IPO with this threat hanging out there. Tumblr is worth a billion because of the strategic value to Yahoo. In this particular case Yahoo can close massive gaps in age demographics and mobile in one fell swoop. Tumblr was discussing ad revenue of $100 mil this year. Yahoo, with much deeper experience and relationships here, can probably do much better than that this year and beyond. So it may "pay for itself" within 3 - 5 years which is nice on top of all the other benefits.

Yahoo could monkey around and try and pick it up in a "fire sale" in 12 months for $500 mil. But maybe that never happens and they still wake up tomorrow well behind in the youth and mobile demographic. I love that Yahoo, after sooo many years of indecisiveness, is being decisive and bold. Not sure if it'll pay off but these seem to be well thought out calculated risks.

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

#79

Post by jonpeda »

zaidf wrote: post #63

This makes it pretty simple to judge Marissa Mayer's performance at least in the next year. If Tumblr shows any sign of failure, its pretty much equivalent of Marissa Mayer failing at Yahoo. If tumblr shows signs of progress not seen Pre-acquisition, it's a sign of an ex-Googler making a smart acquisition AND making it succeed in the long run. Google is the best company when it comes to making large acquisitions work…

Hmm. Those two examples are from many, many years ago. What about more recent acquisitions?

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

#80

Post by DannoHung »

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.

What the heck does Flickr actually need? Social garbage? No thanks. Just let me put my fucking photos somewhere. I'm a paying customer for like 6 years, it does exactly what I want. The only feature Flickr needs to work on is making uploads from my editing app easy. Everything else can go take a flying fuck off a short pier.
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