Ronny Lam

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Tumblr: Can You Turn Down $1.1 Billion

Tumblr has got a $1.1 Billion offer to get acquired by Yahoo! Good news for Tumblr you might say. But the question is who will gain from the acquisition. Looking at examples like Flickr and Delicious it is not good for the service itself and Yahoo. The only ones who gained are the original owners/shareholders.

The acquisition might be good for Yahoo. Marissa Mayer is reorganizing the service offering and Tumblr might really help to polish the Yahoo image. But users must be afraid that the service will degrade as per my initial examples. A scenario like the recent acquisition if Instagram by Facebook, where Instagram stays independent until now, might offer the best for both worlds.

But the ultimate scenario I read recently is to turn down the Yahoo offer, like Facebook did in 2006:

His only partial rationalization at the time was that in the history of Yahoo, it had made two $1 billion offers that were also turned down. And those were to eBay and Google. “At least I could actually make a pseudo-scientific argument that in every case Yahoo offered $1 billion and it was rejected, it was the correct thing to do,” said Thiel.