Yahoo! Inc. (NASDAQ:YHOO) Turns Tumblr Into A Standalone Entity


Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer wants Tumblr to remain as a standalone firm.

The company wants Tumblr’s sales team to operate in the same way that they were operating before the acquisition in 2013. The announcement came after the firm failed to reach its earnings expectations and also as it carries out internal restructuring as part of its plans for the future. Yahoo’s revenue target for Tumblr in 2015 was $100 million, but the microblogger was unable to reach that objective.

It appears that the company has been contemplating its direction for quite some time now. There has been speculation that Yahoo will become a holding company. If so, the firm will most likely sell Tumblr. This will make Yahoo more appealing to buyers interested in purchasing a social user base that already has a large customer base.

Tumblr’s sales team responded to Yahoo’s decision with a statement that it has introduced various innovative ad products to help advertisers meet their requirements as well as enhancing value for advertisers. The team also announced that it has reverted to the dedicated direct sales team. Yahoo’s previous plan with Tumblr disrupted Tumblr and thus the need to take a different approach. The initial plan involved combining the financial teams from both entities, but Tumblr did not feel comfortable with the decision.

Yahoo also feels that it might have overvalued the acquisition. The firm paid $1 billion to acquire the blogging site three years ago. Yahoo recently devalued Tumblr by $230 million. It is not clear what direction Tumblr will take, but it will most likely work towards introducing new ideas that will make the platform more appealing to attract and retain its user base.

The Tumblr team stated that they are happy with the progress that they have made during their engagements with the Yahoo team. Mayer stated that Tumblr’s priority is to drive more user growth. She also said that more than 80% of the users log on using mobile devices.