Investors were positive if lukewarm on Yahoo’s plans to purchase Tumblr. Yahoo’s share price was up 1.22 percent early Monday to $26.85 in early trading.
On her Tumblr blog Yahoo CEO Marissa Mayer tried to calm investor concern about the impending merger by vowing, “We promise not to screw it up.”
David Karp will remain CEO at Tumblr, though there’s no word yet on how long he’ll be obligated to stay on after the merger is complete. With 300 million unique users every month and 105 million blogs, Tumblr has nearly 120,000 new registrations every day. As one of the fastest growing networks anywhere on the internet not screwing it up will be priority one for Yahoo both now and after David Karp’s management contract ends. With over half Tumblr’s user base on the mobile app and half of them accessing the site an average of 7 times per day, Tumblr may become the anchor application for Yahoo to expand its mobile reach.
At a more practical level Mayer promised to leave the product team in place and vowed to let Tumblr operate independently.
Yahoo will essentially pay all cash for Tumblr, using the proceeds of last year’s sale of half their stake of Alibaba.
While investors are cautiously optimistic, users are a bit more skeptical as summed by a Twitter post from Comedy Central:
There’s at least one petition opposing the deal and social media is alive with angst. It does seem like both organizations learned a lesson from Instagram’s fiasco earlier this year that had a profound though short-term impact on their traffic. In the fickle marketplace of the internet, alive with startups and new competition, one does not simply tell users what they want.
Overall I tend to side with investors that this is a good deal and one that Yahoo desperately needs to succeed. In the inevitable transfer of culture that will take place when any two large organizations merge, the best case for Yahoo is if Tumblr comes in and throws open the windows to let in a much needed draft of fresh, creative air into the dusty old hallways of Yahoo.