Yahoo has a business, but generally mediocre products. Tumblr has a great product, but no profit. So recently confirmed reports that Yahoo CEO Marissa Mayer has "put a stake in the ground" by acquiring the startup for $1.1 billion makes a certain sense.
Since joining Yahoo last year, Mayer has put revamping the company’s products at the front of its to-do list—going on a talent shopping spree, centralizing the company’s mobile operations, and releasing improved versions of core "daily habit" products such as the Newsfeed, Flickr, the Yahoo Weather app, and Yahoo Mail.
If all goes according to plan, Yahoo's revamped products will look, at least growth-wise, more like Tumblr. The six-year-old microblogging site is growing quickly—according to Comscore, from about 58 million unique visitors worldwide last year to 117 million this year. Together, Tumblr users have created more than 100 million blogs and are returning to the site about 20 billion times each month.
Which is why Yahoo shouldn’t just buy Tumblr; it should learn from it. Here's how:
If Tumblr were just another site that allowed you to create a profile, it would be redundant. But the platform is more about your creativity and interests than it is about you and your friends—and that makes it different than other social sites."They [other social networks] are not tools built for creative expression," Tumblr CEO David Karp said when asked about where Tumblr fits into the ecosystem at a 2011 interview. "Nobody is proud of their identity on Facebook."
Yahoo doesn’t know who your friends are. But with content that spans just about every interest area, it could easily learn what you are interested in. Like Tumblr, it could base identity and social interactions within its products not solely on who you know, but on what you create or enjoy.
Buried somewhere in Yahoo Groups there are surely gems of user-created content. But good luck mining them. The product is stuck in the forum age (it literally hasn’t been updated in 10 years), and using it feels like being trapped in the world’s spammiest inbox. Easy content creation and social tools are only one half of the equation for the engaged community Yahoo needs. Content also needs to be enjoyable to consume.
Had it not been neglected, maybe Yahoo Groups would look more like Tumblr, with its streamlined feed, straightforward reaction threads, and clean, image-centric interface. Flickr’s revamp certainly does. The team reduced menu choices on the site’s navigation bar from 52 options to a little over 20, made its app easy to navigate, and replaced thumbnails and links with a focus on photos. Yahoo's newsfeed also updated to modern web conventions like infinite scroll.
A customizable newsfeed that pulls content from Yahoo's various properties and partnerships—Autos, Flickr, Travel, Finance, Weather, Jobs, Twitter, Facebook, and Tumblr—and makes them (like Tumblr's newsfeed makes blogs) easy to browse in one place, would be another lovely borrowed trick.
David Karp famously told the Los Angeles Times his company was "pretty opposed to advertising." But it is probably more accurate to say he dislikes traditional web advertising. When the Wall Street Journal later asked him about his opposition to his most feasible revenue source, he said: "The video ads that we're hit with are always in the form of pre-roll, the video reel you get at the front of an online video. So they're delivered at the most frustrating moment possible. And everything else, I think, is strikingly uncreative."
Karp has since introduced native advertising on both web and mobile. Instead of buying banner ads, brands can pay to have their own Tumblr blogs seen by more people. Because the more appealing their content is, the more it will be reblogged, brands have necessarily gotten creative. Some, for instance, are using animated gifs. Others have developed extensive editorial content in the place of ads.
Yahoo's business relies on display ads for about 40% of its revenue, but its sales in the sector are declining.
Though the company recently introduced something it calls a native ad within its newsfeed, it has an even bigger opportunity to introduce new types of advertising products as it continues to build new mobile products. What does an ad, for instance, look like in the newly beautified Weather app? Or in your mobile Flickr Stream?
Perhaps Yahoo can channel Tumblr's creativity, if not its profitability, as it decides.
[Image: Flickr user Andrew Morrell]