[Update, Saturday, May 18: Yahoo's board plans to meet Sunday to discuss and decide on a $1.1 billion, 100 percent cash acquisition of Tumblr, AllThingsD now reports.]
The AllThingsD team was in attendance at JP Morgan’s Global Technology conference and heard the Yahoo CFO, Ken Goldman, admit that Yahoo needs to regain its “cool” image again. (Did it every have that?) And either Goldman or some other credible sources spilled to the AllThingsDers that Marissa Mayer thinks Tumblr could be the answer, or part of it.
Peter Kafka and Kara Swisher, Will Yahoo Try to Get Its “Cool Again” by Doing a Deal for Tumblr?
According to sources close to the situation, that could mean a strategic alliance and investment in or outright buy of perhaps the coolest Internet company of late: Tumblr.
Sources said the talks were serious, but any kind of deal — of course — could come to naught.
But it’s not the first time Yahoo CEO Marissa Mayer has been interested in the New York-based hipster blogging service. As an executive at Google, she had closely watched its fast growth, along with that of Foursquare. Since she took over at Yahoo, several sources said that she has met with its top execs, including founder and CEO David Karp.
But sources said that interest has gotten stronger more recently, coming at the same time as Tumblr has been stepping up its efforts to raise a large funding round that could value the New York company at $1 billion. In a series of fundings since 2007, Tumblr has raised $125 million so far, at a reported valuation of $800 million.
“If you could pick a company that fits in with what Marissa Mayer has demonstrated in her career — aesthetics software technology and fast-growing — you could not land on a better choice,” said another source.
Still, any kind of deal with Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.
My interest in this is multipart. I have my stoweboyd.com blog on Tumblr, and I have found it an enormously rich social experience. It’s much more than just being a blogging platform, because Tumblr has implemented perhaps the best realization of the open-follower model. This makes it incredibly valuable to someone like Mayer, who could in one deal change the perception of Yahoo from “your mother’s home page” to the new place to live your life online, in apps like Flickr, Tumblr, and some of the six or more clever apps she’s gobbled up in the past few months. Yahoo acquired Astrid, the team task management app (see Yahoo buys Astrid), but it is going to shut that down and use the team on some other project.
The rumors that Facebook and Microsoft are also sniffing around really worry me, both personally, as a Tumblr user, and as an observer of the rise of Tumblr and these other firms. I feel a matchup with Yahoo could actually benefit Tumblr and even me, as a user. But an acquisition by Facebook would probably lead to my leaving Tumblr, as soon as someone built something reasonably Tumblresque. And I bet Microsoft wouldn’t know what to do with Tumblr if it got it. Does it understand the open web?
The reason to talk about Tumblr here at GigaOM Research, though, is the impact that Tumblr could have on next-generation coworking tools (both collaborative and cooperative tools). To date, Tumblr has been largely dismissed by the serious people in the world of technology, who generally pigeonhole it as a social media system with millions of images being reposted by teenagers, when in fact Tumblr is a giant and growing social network. As Union Metrics CEO Hayes Davis recently said, countering the perception that Tumblr is an alternative to WordPress (see disclosure below),
‘They’re perceived as an alternative to WordPress or a blogging platform [but] it’s an enormous social network. People read Tumblr like they read Twitter.”
I think that Yahoo would be unlikely to spin out an enterprise version of Tumblr, but someone else will sooner or later consider it, just like David Sachs did at Yammer: “Twitter for the Enterprise” was his winning pitch at Techcrunch40, and he sold to Microsoft for north of $1 billion last year.
The important thing to consider in the hypomythical world of a “Tumblr for the Enterprise” is that Tumblr already supports the idea of inside and outside experiences, depending on whether you are a Tumblr user or just a tourist, and my idea of open work jibes with that (see Open Work is the next high water mark for social business.) Tumblr is based on typed posts, like Audio, Photo, and Text, so other information objects would fit in fairly well, like Task and Event. Or more complex types of posts, pulled from an app store, like Podio supports. Also, the way that Tumblr now supports curated topics (or tags) is exactly the sort of community curation that should be built into enterprise tools, which no one else has.
Obviously there is a lot that would have to be done to make something that starts with the things that make Tumblr interesting and fluid and then supports the cooperative work that I think will define the near future. I will be revisiting these musings in the next days and weeks and watching the rumors flow.
Disclosure: Automattic, maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, GigaOM. Om Malik, founder of GigaOM, is also a venture partner at True.