Yahoo aims for hip with Tumblr

Yahoo was a name to conjure with back in 1997 when I edited the Australian NetGuide.

It sat near the centre of many people’s internet experience. That’s no longer the case.

In the time before Google, Yahoo’s directory was a popular jumping-off point for finding web content. Google sucked all the air out of that business and the rest is history.

And yet Yahoo lives on in places

Yahoo remains popular  – especially in the US. Today it is mainly a content portal with strength in a handful of areas including sport and entertainment news. And it owns the popular Flickr photo-sharing site.

You couldn't describe Yahoo as hip or happening. Hell, I’m past 50 and it looks fogyish even to me. And the company’s revenue has been in decline while its online rivals continue to grow.

Tumblr, however, is hip. And happening. And it is popular with a younger audience than most of Yahoo’s current fare.

A billion dollar investment

So spending over a billion dollars on the business could make sense. Most observers expect Yahoo to find ways to make money from Tumblr – until now it has barely paid its way. I'm not convinced by this argument, but we shall see.

Yahoo’s challenge is to parlay all it gains from Tumblr back into the mothership without killing the hipper, younger brand. The company will want Tumblr users to link to its content channels and advertising is going to play a bigger role on their sites whether they like it or not.

Presumably part of the goal is for the lively social media blogging site to pump some adrenaline back into the Yahoo brand. There are some lucrative big data opportunities lurking in this mix as well as all those hip young things leave trails across the webs for Yahoo’s servers to mine.

The danger is that Yahoo will stifle Tumblr. That would be like watching a billion dollars flushed down the gurgler