When Yahoo decided to snag Tumblr for a whopping $1.1 billion in June 2013, the excitement was palpable. David Karp, the young and hip CEO of Tumblr, even got to keep his title, which was basically Yahoo saying, “Hey, we bought your baby, but you can still babysit it. Cool?” However, as the saying goes, not all that glitters is gold. Yahoo had dreams of transforming Tumblr into the cherry on top of its advertising pie, but those dreams quickly fell flat.
Fast forward a few years, and we find ourselves in 2016, where Yahoo stared at its shiny investment and realized it didn’t quite sparkle like they hoped. Why? Well, it turns out that Tumblr’s advertising sales were about as effective as a screen door on a submarine. Because of this underwhelming performance, Yahoo had to admit defeat and wrote down a staggering $712 million off of Tumblr’s value. Ouch! That’s not just a mild ouch; that’s more of a “let’s face palm ourselves into oblivion” ouch.
Now, if you thought that was it for the Tumblr saga, not so fast! In June 2017, Verizon Communications swooped in like a superhero with a questionable costume, acquiring Yahoo along with its troubled trophy, Tumblr, and folding both into its rather forgettable Oath subsidiary. One might imagine Verizon polishing up their new acquisitions, only to find that Tumblr had become a bit like a vintage lamp: unique, interesting, and totally outdated for the current market.
In a nutshell, Yahoo lost a jaw-dropping $712 million on its Tumblr investment, which serves as a wry reminder that sometimes even the trendiest things can turn into a money pit. The world watched, popcorn in hand, as one of the latest tech tales unfolded—fun, messy, and filled with utter disbelief. So, it’s clear: if you think buying a social platform is a surefire win, maybe just snag yourself a pet rock instead. At least they don’t require constant “updates.”
