Rewind 3 years back to 2013, Yahoo acquires Tumblr for $1.1Bn from founder David Karp. A year after Facebook acquired Instagram for $1Bn in 2012, in both cases the parent company intended to monetize the vast user base of both apps. Snap back to today, and looking back we can see how overvalued tech companies were in the past. Yahoo recently announced it would be laying off 15% of its workforce, reassessing Tumblr's value again down from $990M previously to $760M a devaluation of $230M. The downgrade seems to stem from Yahoo's inability to make meaningful revenue off of the micro-blogging platform. Ever since Yahoo bought Tumblr they have implemented a number of changes that have not bode well with the user base. I myself have a Tumblr and can personally attest to the difficulty of trying to advertise to a user based that is against ads at its core. Tumblrs are quirky people who are very vocal about their attitudes, the new Yahoo administration has made the site harder to use and dropped in changes that no one asked for. Too many ads and the core leaves, not enough ads and you're left with a company you made $1.1bn that isn't making you a dime. I remember when Tumblr first got bought out many people called David Karp a sellout but, maybe he was smarter than us all. Taking a billion dollar check for something you created in your spare time that made $0.00? That's a sweet deal.
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