Yahoo is eyeing the one social network it can afford
that would make it feel young again.
The company is considering buying Tumblr, according
to two separate reports on AllThingsD and Adweek. UPDATE: The deal was made official on Monday.
AllThingsD reports that Yahoo would consider an
investment or corporate alliance in addition to outright buying all the
Tumblogs; Adweek is more confident, stating that "Yahoo is in serious
talks" to buy Tumblr. Both cite a valuation of $1 billion. The site, known
for cat GIFs and amateur porn, expects to turn its first profit this year.
And so another social network that hasn't proven
profitable might earning a 10-figure buy. It seems it's become an annual
tradition. If you'll recall, Facebook scooped up Instagram in 2012 in a deal
that at the time was worth $1 billion, although ultimately worked out to $736.5
million, after the company's stock dropped.
What's up?
It's the need for the young.
Tumblr may
be Yahoo's best shot at gaining an audience of young people.
The aging tech company, which Marissa Mayer took
over as CEO to much fanfare last year, is struggling to attract web users in
their teens and 20s while it holds onto an older audience tethered to the
company with 90s and early-aughts-era email accounts. Though Yahoo itself
doesn't offer solid numbers, the
app Hunch estimated in 2011 that 42 percent of Yahoo email
users are between 35 and 64. Only 27 percent of Gmail users are in that age
bracket.
Yahoo is missing the the sweet-spot demographic of
24- to 35-year-olds that advertisers climb over each other to get. And it
certainly is missing teens, the young adults of the future that brands also
spend lots of money to impress.
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