Go slowly on Tumblr.
That was the key message for Yahoo management by investors and industry watchers as they digest Yahoo's $1.1 billion acquisition of Tumblr that was announced Monday.
Like a parent adopting a creative but unruly teen the search engine giant should proceed with caution in integrating their operations they advocate and ensure the continuity of compelling and often rudimentary ways in which blog posts are created and shared even if some popular accounts contain content that is unsavory amateurish pornographic or not properly licensed.
Make sure the integration is just in the back end and nurture (Tumblr's) independence says Ryan Jacob fund manager of Jacob Internet Fund a Yahoo shareholder when asked what advice he would give to Yahoo CEO Marissa Mayer. To make sure they continue to grow the way they have and be the parent that can provide operational resources that companies like Tumblr needs. I think Yahoo has to be really careful. It'll be a mistake to try to subsume it into Yahoo's bureaucracy.
David Karp the 26 year old founder of Tumblr and his young team should be given the autonomy to run the company from his New York office without interference from the West Coast Jacob and others say.
Yahoo should counsel Tumblr on selling and delivering ads for buyers Jacob says but steer clear from the temptation to dictate content or restrict Tumblr's service. Tumblr has done a terrific job on their own in managing (content) he says.
The message of autonomy was as important for Karp who will remain Tumblr's CEO. In a message to his team that was laced with vocabulary that would make Wall Street cringe he reminded employees that Tumblr is not turning purple a reference to Yahoo's logo.
Our headquarters isn't moving. Our team isn't changing. Our roadmap isn't changing he wrote. Tumblr gets better faster. The work ahead of us remains the same.
Brian Wieser an analyst at Pivotal Research Group says Mayer has an opportunity to prod a large base of Tumblr users to produce a heavy volume of premium content for selling ads or inventory as ad execs call them. Her biggest challenge will be to thread the needle between holding on to Tumblr's users creating a sellable inventory of compelling blogs and figuring out innovative ad products.
Tumblr which relies on user generated content that ranges from professionally produced videos by large organizations like Comedy Central to silly GIF images by teenagers has only started selling ads last year. Its minimalist appearance has always been a selling point for users and a sudden onslaught of randomly placed ads could drive many of them away says Simon Dumenco media columnist for Advertising Age.
There are people who will abandon any website that they feel they have personal ownership but has become cluttered with junk he says citing MySpace as an example. Going slow is the only real way to preserve the purchase. If (Yahoo) is willing to take this financial hit they're willing to take the financial hit in going slow and not flood it with ads.
Dumenco agreed with Wieser's assessment that Yahoo Tumblr's ad strategy should focus on premium blogs the ones that drive the site's traffic and attract viewers who will tolerate well placed promotional messages in exchange for reliable entertainment or useful information.
Like Google's YouTube which also suffered initially from a flood of amateurish home videos only to see its content quality steadily improve over the years Yahoo Tumblr should also consider investing in original content Dumenco says.
A lot of (its) blogs aren't getting traffic he says. The trick here is that they have to figure out a way to attract and (make money from) their best bloggers. (Ask them) 'What can we do to work together to make it a co enterprise '
Renee Miller founder of integrated advertising and marketing firm Miller Group in Los Angeles says she'd urge Yahoo's Mayer to articulate more often and clearly how Yahoo and Tumblr may and may not work together in selling ads.
There's a big disconnect between Tumblr and Yahoo she says. Explain to clients what's in it for them. Give me a reason to buy. At this point I don't see any benefits.
Contributing Matt Krantz
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