How Tumblr Can Make Money And Not Piss Us Off

The debate swirling online about how Tumblr (and by extension, Yahoo) can make ad money without alienating a fickle hipster audience is fairly straightforward, if you know how Tumblr works.

Most users would be pissed off if Tumblr put ads a/ on their blogs (extremely pissed off), or b/ in their dashboard stream of Tumblr posts from followed blogs (really pissed off). We consider that our territory, because it is by us, for us.

On the other hand, the Tumblr tags area has a definitely different feel to it, and therefore I think people would be more accepting of Tumblr going more mercantile there. First of all, if I am looking at the stream of all posts tagged ‘Yahoo’ or ‘Tech’ I expect to see posts from strangers, people that I am not following. Therefore, the tag stream does not feel like a personal space, one defined by me. Following a tag is not like following a person, it’s like visiting a museum.

Second of all, a handful of the most followed tags are curated by Tumblr. In these cases, Tumblr has expended time and energy to contact and work with leading Tumblrs knowledgeable about ‘Architecture’ or ‘Movies’ or ‘Food’, and then handing over curatorial tools to that group to pull in the most interesting and insightful posts relative to the tag. 

Placing even a fairly sizable chunk of those tag pages to ad space — especially if the editors were somehow involved in deciding that the ads were relevant to the topic — wouldn’t run against the grain, I think. Moreover, the ads themselves could be made to feel like Tumblr posts, too, like Tumblr Radar — selected posts of general interest — currently does.

Perhaps it’s so obvious that it can go unsaid, but clearly some camera company would be willing to pay a substantial sum of money to have tens of thousands of people daily see its offerings when they visit the Tumblr ‘Photography’ tag page. Likewise for the pages associated with ‘Cars’, ‘Weddings’, ‘Wine’, ‘Tattoos’, and ‘Russian Brides’. Ok, forget the ‘Russian Brides’, but the rest stays.

So the answer for Yahoo is tag stream advertising.

The best angle might be for companies to use the space as a mini curation. For example, IBM might rent the space on ‘Social Business’, and curate great content on that topic from around the world. This would actually be providing a great service, since Tumblr doesn’t have curation on that topic yet. It might actually help pull the community into Tumblr, just for the sake of accessing that content.

At any rate, given the near infinity of topics that are of interest to groups of people, and the ready-made, bottom-up nature of tags, Yahoo could be selling Tumblr participation in this way on tens of thousands of tag pages, and Tumblrs would feel like they are better off, not dissed.

On a completely unrelated topic, Tumblr Pro could have legs, too. For example, I would be willing to pay $5/month, let’s say, to be able to pull any RSS feed into my Tumblr stream, so that posts from friends’ non-Tumblr blogs would just show up. Or the Bits Blog from the NY Times, or dozens of others. Tumblr could make money collecting fees for the Financial Times, or other paywalled destinations. There are obviously other premier services that people would be willing to pay for, over and above this pull-to-read service. 

21 May 2013 60 Permalink

No, We Should Not Protest The Yahoo Tumblr Acquisition

Paul Higgins wonders if we should oppose the Tumblr acquisition by Yahoo:

Paul Higgins, The Community, Tumblr and Yahoo - Do we Protest?

There are a couple of services that are really important to my life and my business. One of them is Tumblr and the other is Evernote. In promoting Evernote for example I often tell people that if Microsoft buys it I will retire. That is because it has become so important to my work flow and because of my view that large corporations hardly ever get these sort of services right.

Tumblr is equally important to me in a different way and I am part of the community and honoured to be one of the Tech editors, and have almost 200,000 followers.

There are rumours going around that Yahoo is in negotiations to buy Tumblr which worries me a hell of a lot. Let me be clear that I have no problems with the founders and investors making money off the contributions of the community but I worry what would happen to Tumblr in the hands of a large entity.

In a world where business models like these require both the founders and investors to contribute and create but the community to contribute and create as well, valuations and business strategies have a different flavour. No community and there is no business valuation. If you have similar concerns then please reblog or like this post. I intend such support to be a signal to both Tumblr and Yahoo (if the rumours are true) that the community is concerned and should be involved in the decision making process. Maybe that is thinking with delusions of grandeur or maybe it isn’t - over to you the community to decide.

I like Paul, and I can understand his concerns, but I don’t think we should protest this acquisition, but instead welcome it.

Tumblr is confronted with the growing attention of its most direct competitors — Facebook and Twitter — both of which have large and well-established management teams. Also, it’s not so obvious competitors — Google and Microsoft — are waiting in the wings to buy or copy Tumblr. In a way reminiscent of Zuckerberg, David Karp is a young man under intense pressure to grow the company that he started in high school into a company that will pay back today’s investors 10X or more on an $800M valuation. Oh, and keep a growing, fickle, and international community of users coming back for more. His genius has certainly been focused toward building the Tumblr architecture and staying close to his vision. But he doesn’t necessarily have the skill set, the team, or the inclination to do all the things needed for the next 10X growth. He may turn out to be Steve Jobs, but that remains to be seen.

My worry is that he could wind up bringing in someone promising as COO, to help push forward, Karp may wind up being Mitch Kapor at Lotus, who hired Jim Manzi, and wound up losing the battle for the office suite to a late-to-the-game Microsoft. Or creating something like the Sculley mess at Apple.

Despite my concerns about Marissa Mayer’s ‘no remote work’ edict — which can be read most generously as an effort to reanimate a dispirited organizational culture, and less generously as an effort to indoctrinate the Yahoos with a top-down, Googlish entrepreneurial fervor — she has been making good acquisitions in the past months, and I believe that she has the chops to help Tumblr crack the code of advertising. 

Mayer’s tenure at Google would translate into the skills needed to support Tumblr in growth on the operational side — keeping the service up and humming — and working to make revenue flow. Also, by selling at the price that Yahoo is willing to pay, today, to suit Yahoo’s needs, Karp, his investors, and his team will be able to decrease or obviate the possibility of bad technical or strategic decisions later, forced by the need to grow revenue or execute a dubious liquidity path. That turn of events is the one I worry about most, not becoming another Flickr in Yahoo’s bullpen.

So, for whatever negligible influence I might have on events, I cast my hypomythical ballot in favor of this deal, because chance are it could turn out great, and a purchase by Microsoft, or the possibility of a Lotus turn of events two years from now, for example, worries me much more.

18 May 2013 42 Permalink

Marissa Mayer’s Housecleaning Goes On

Marissa Mayer is not taking it slowly: the attrition rate at Yahoo’s board is really blinding. Most recent is the announced departure of Alfred Amaroso, the chairman, who assumed the role 14 months ago. Yahoo has appointed another director, Maynard Webb Jr, former CEO on LiveOps, as interim chairman.

Yahoo Chairman Is Stepping Down - NYTimes.com

Mr. Amoroso and Mr. Webb joined Yahoo’s board 14 months ago when four longtime directors stepped down under shareholder pressure. Yahoo’s co-founder, Jerry Yang, started the exodus when he left the board a month earlier. Finally, late last year, Intuit’s chief executive, Brad D. Smith and the Weather Channel’s chief executive, David Kenny, stepped down.

[…]

A former accounting executive, Sue James, is now Yahoo’s longest-serving director. She came on board three years ago. The other directors, including Yahoo’s chief executive, Marissa Mayer, have been appointed since February 2012.

The rapid turnover probably suits Ms. Mayer, who has been trying to infuse Yahoo with new talent and ideas since she defected from a longtime job at Google to tackle the challenge of turning around one of the Internet’s best-known companies.

I’m betting that once the dust settles, the average age of a Yahoo board member will have dropped a few decades, and the gender ratio will shift. Right now, the only women are Mayer and James.

26 April 2013 6 Permalink

Marissa Mayer’s Obsessions

Marissa Mayer’s quest to upgrade Yahoo ‘culture’ continues. Apparently, she’s very focused on hiring only the best and brightest, which in her worldview equates to top universities and good grades. She also something of a control freak, reviewing every candidate being offered a job, personally. And the latest wrinkle was a plan to test Yahoo admins academically, now shelved:

Alexei Oreskovic, Yahoo’s Mayer gets internal flak for more rigorous hiring

“Why can’t we just be good at hiring?” Mayer said, playing off a line from what she called one of her favorite movies, 1989’s “Say Anything”, according to the employee. He did not want to be identified because he was not authorized to discuss Yahoo’s internal matters.

The question, according to Yahoo insiders, reflects wider concerns among hiring managers and rank-and-file employees over the way Mayer has tightened hiring practices since becoming CEO last July, as part of an effort to transform Yahoo’s workforce and culture.

[…]

The controversy has caused consternation in the administrative assistant ranks as well as the professionals.

Mayer has brought Google’s high recruiting standards to Yahoo, in particular its focus on academic credentials, according to current and former Yahoo employees. High grades from top-rated schools such as Stanford University, where Mayer earned her masters in computer science, are important. A computer science degree is much more valued than others, even the electrical engineering degree that Yahoo co-founder David Filo earned, these people said.

Yahoo said in January that it added 120 employees with computer science degrees in the fourth quarter. It is not known how many employees quit that quarter, but two former executives said Yahoo’s attrition rate averaged at 20 percent historically.

Mayer’s focus on academics extends to existing staff as well. For instance, some administrative assistants were recently informed that they had to take a modified version of the law school admissions test, for reasons not fully explained. The demand sparked consternation and Yahoo later backed off, according to a person with knowledge of the matter, who said it was unclear how widespread the requirement was intended to be.

We’ll see if she can out-Google Google. 

By the way, I think the line from Say Anything was this:

Lloyd Dobler: I am looking for a dare-to-be-great situation. 

Mayer’s also contemplating shutting down or trimming remote locations like Bangalore. 

My bet is that she’d be much happier — except for the paycheck — starting a new company and building it piece by piece, every cog and piston. But that would require a vision for a new company, a new direction.

Except that she doesn’t seem to have a real vision for Yahoo, yet, does she? She’s moving around the furniture, and ordering people to march up the hill and down again, but what is Yahoo supposed to mean? Has she clarified anything about Yahoo’s direction, yet? Not to me.

This is someone who made her bones A/B testing how much whitespace should appear on the Google search page. We’ll have to see if that aspergerish obsession with product minutiae and domination of corporate culture will add up to sustainable brand value, or even a worthwhile product introduction.

Source: reuters.com

13 March 2013 13 Permalink