But can she follow it up with results?
It’s true that Yahoo’s stock has been red hot, with a gain of 73% since Mayer came on board in mid-July 2012. Yet the move is likely the result of the boost from the company’s Asian assets, Alibaba and Yahoo Japan.
Of course, Marissa wants to go beyond this — and a key is the $1.1 billion deal for Tumblr. The microblogging site generates enormous amounts of traffic, has young users and yes, there is an interesting mobile play.
So will the Tumblr deal be what returns Yahoo to its former glory? To see, I reached out to a variety of top people in tech:
Roman Stanek, the CEO of GoodData
“Tumblr marks Yahoo!’s ninth acquisition this year … There’s no secret behind this acquisition spree. Tumblr is Marrisa’s bet on the future and Yahoo!’s potential inroad into a younger, hipper demographic. Are they betting on the right horse? I believe social networks are generational. While Facebook Facebook might be the social network of today, Tumblr might very well be the network of the next generation.”
Marc Smookler, the Co-Founder of Written
“It’s a big bet on a young entrepreneur but also a bet on the way people communicate and how content will be delivered and consumed. Ultimately, it’s a smart move by Yahoo as it’s expected to drive Internet traffic and will bring a social media aspect to its overall business strategy. Facing stiff competition from Facebook and Google Google, advertisers should be more compelled to spend as more users engage in Yahoo services. The key for Marissa will be to keep Tumblr ‘separate’ from Yahoo and allow it to thrive and keep its culture and management teams intact.”
Josh Alexander, the CEO and Co-Founder of Toopher
“There are comparisons to the Facebook/Instagram deal. But keep in mind that Facebook was built on sharing photos, and given Instagram’s popularity and growth, Facebook could not afford to let that opportunity grow outside of its brand. Plus, at that point in time, the Instagram purchase only cost 1% of Facebook’s market cap. The Yahoo/Tumblr acquisition does not offer the same sharp edges. While Yahoo was built for search, it has grown well beyond those boundaries; however, its identity is not a blogging and photo-sharing platform. As such, this acquisition seems beyond the scope of its wheelhouse. Further, I can appreciate the need for legacy players to buy innovation, but at 3.8% of its market cap, Tumblr is a significant investment to not own the market.”
James C. Foster, the CEO and Founder of Riskive
“Marissa Mayer is not Billy Beane. She has no intention to build up the Yahoo business via singles and doubles alone. While this is a proven model, think Southwest Airlines Southwest Airlines or Costco, this strategy requires a different approach and team architecture. Marissa has architected her team to be lean and mean to free up cash for this exact type of premeditated opportunity. She needs the big wins – she needs the eyes and wallets of the media – and quite honestly she needs the big at bats to get those wins. Tumblr will be the first in a series of big swings that will take at least nine months (or innings) to play out.”
Christian MacLean, the CEO and Co-Founder of Beaucoo
“In the past you’d see high growth/zero revenue companies get big acquisition offers and turn them down, only to see them get ridden over the falls as the next consumer platform takes off. The challenge going forward will be keeping Tumblr’s young user base happy when Yahoo decides it needs to clean up the platform’s content (look at Reddit’s challenges) and monetize . The switching cost is so low and it’s not hard to carry your friends with you to a new platform that doesn’t want to show you ads or apply a content policy.”