Whenever a big technology buyout happens, like Yahoo's agreement to acquire blogging site Tumblr, I like to recall IBM's $3 billion deal for Lotus Development Corp., which was the first big tech story I covered back in 1995. At the time, that price was shocking, and it still makes Yahoo's $1.1 billion cash deal for Tumblr look small, but we no longer get too excited by large merger and acquisition numbers in the post-dot-com era.
Users, on the other hand, are another story -- one that teaches us some important lessons about the social media-mediated world we're living in. Immediately after the news about the Tumblr-Yahoo deal broke on Sunday, Tumblr users started revolting. Most of the gripes were about the threat of advertising appearing on Tumblr blogs -- more than 100 million of them, with 51 billion posts -- that to date have been ad-free.
Many of the users' concerns have merit. Yahoo CEO Marissa Mayer said Yahoo will respect Tumblr's autonomy, but it's hard to see how Yahoo can monetize the site if advertising isn't involved. Businesses may find a marketing home on Tumblr, but will that pay Yahoo? There's some irony here, too. Forrester analyst Zach Hofer-Shall told SearchCRM's Delaney Rebernik last year that lacking tangible ways to derive revenue from the site, "it may be [that Tumblr execs] don't plan on being a billion-dollar company; they plan on being a billion-person network instead."
Recall as well that Yahoo has had a very mixed history of acquisitions. Geocities, acquired for more than $3 billion in 1999, eventually was shut down. The Broadcast.com acquisition made Mark Cuban a very rich man, but accomplished little else.
Content ownership at issue
Loud user reaction has become commonplace every time a company threatens the status quo or autonomy of a user's social media world. Facebook's acquisition of Instagram shook up millions of users last year. And Facebook's own users freak out every time the company changes homepage or privacy settings without their permission. Users believe social networks like Facebook and Tumblr belong to them, not to the corporate entities that run the sites.
This sense of ownership of content versus the mere renting of space is central to the success or failure of any social media venture, whether it's a Silicon Valley startup or an internal tool for employee collaboration. What's in it for the user? Users, especially younger, Generation Y types, have to be compelled by their own needs to participate and will not use tools that are forced upon them.
How many new collaboration tools, intranet applications and the like has your organization tried to deploy that never caught on? But plenty of useful tools have found their way into the enterprise through users looking for capabilities that IT wasn't able to supply. AOL Instant Messenger was one of the first "unauthorized" apps to creep into the enterprise. Eventually it was adopted by companies -- or replaced by something more controllable but perhaps less popular with users.
Building partnerships with users
The lesson highlighted by the reaction to the Tumblr-Yahoo deal is to learn from the success of what works for users. Smart companies will realize that what they have been looking for all along is already being used by millions of people, and will adopt Facebook- and Tumblr-like models as the de facto standards for collaboration.
Yahoo certainly is being bold in making this move, and the acquisition could end up being a success. What's disconcerting is projecting the evolution of every Instagram and Tumblr and envisioning they all end up getting rolled into one big YaGoogFace site. Where is the individuality, creativity and collaborative power of social media going to lead us then? Yes, cynics will point out that Tumblr is 99% nonsense, and it's true. But it would be really cool if Yahoo reached out to Tumblr users and treated them like partners in the acquisition. Because really, what is it that Yahoo is buying -- the technology or the people who use it?
Scot Petersen is the editorial director of TechTarget's Business Applications and Architecture Media Group. Email him at firstname.lastname@example.org.
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Scot Petersen, Editorial Director asks:
What is the future of Tumblr?
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