“Setting aside the question of value (did Yahoo overpay?), this deal makes tons of strategic sense for three reasons. First, Yahoo immediately obtains Tumblr’s massive audience of younger, highly-engaged users. Advertisers covet that audience and now Yahoo has a tremendous source of those users to promote to its advertising clients. Not only the size of the audience is attractive but also the behaviors in which the audience is engaged when using Tumblr: content discovery, creation, and sharing. That is gold in the rapidly growing world of content marketing. Second, it is about the content. In Tumblr, Yahoo is getting an incredibly deep and broad collection of user generated and brand generated content to provide a very powerful vehicle for advertisers to target messages in very contextually relevant ways, including ‘Native Ads.’ Finally, it is about the platform. Tumblr is a fun, easy to use, and engaging content creation and distribution platform. Its popularity is a testament to that. Much like Google’s acquisition of YouTube and Facebook’s acquisition of Instagram, this deal is about Yahoo gaining a platform hundreds of millions of us spend time on to create, connect, discover and share content of all different kinds. The audience and potential for significant ad revenue is already there so now it is a matter of how Yahoo goes about monetizing it without spoiling the experience or alienating the audience.” — Ben Straley, vice president, social technologies at Rio SEO.
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