Yahoo Buying Tumblr for $1B, But Can They Make Money?

Yahoo’s board agreed on Sunday to buy the massively popular blogger site Tumblr for $1.1 billion in cash. The companies both officially announced the deal early this morning, as MMW reported. This is clearly part of CEO Marissa Mayer’s big picture plan to reposition the company as the tech industry hustles to hop on board …   Read More

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Yahoo’s board agreed on Sunday to buy the massively popular blogger site Tumblr for $1.1 billion in cash. The companies both officially announced the deal early this morning, as MMW reported.

This is clearly part of CEO Marissa Mayer’s big picture plan to reposition the company as the tech industry hustles to hop on board the social media train.

Buying Tumblr would be a bold move indeed for Mayer who tries to breathe new life into the company, but the main question remains: Can they make money?

According to Howie Schwartz, CEO and Founder of Human Demand, “Yahoo buying Tumblr is a smart move, it brings a fresh demographic of younger users to their mix.”

“Monetizing Tumblr, especially on mobile will be a challenge,” Schwartz tells Mobile Marketing Watch. “Just look at Facebook, it has taken them 2 quarters to start monetizing mobile more efficiently.”

“It’s going to take Yahoo time and resources to monetize Tumblr mobile traffic,” he adds. “Tumblr has been playing around with ‘native’ ads which are still unproven on mobile and hard to value.  It will be interesting to see how Yahoo sells through this inventory as it scales.”

Do you think Yahoo made a smart move buy acquiring Tumblr?

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