Can TumblrTube work?
Philip Ellison 13 October, 2014 at 12:10
Marissa Mayer is determined, it seems, to defy expectations. After rejecting every recommendation on how to utilise Tumblr, which Yahoo famously acquired last year, Mayer has now unveiled her master plan for the blogging network: turn it into the next YouTube. Mayer has been reportedly keen to prevent Tumblr from becoming just another “shiny new toy” in Yahoo’s playroom so far, having promised David Karp that it would continue to operate independently. Then in April this year, it was announced that Yahoo was working on its own video platform to go up against rival Google’s YouTube, and even planned to poach some existing YouTube talent.
Now, after months of stalling, it seems that Tumblr will be the basis for this experiment. And just in time, as the pressure is on to make money out of Tumblr. “The $1.3 billion spent on acquisitions has clearly not delivered value to shareholders,” wrote activist investor Jeff Smith in an open letter to Mayer in September. “Not only do we believe that many of the acquired companies were, and still are, losing a considerable amount of money, but we also believe that these acquisitions, on a combined basis, have failed to deliver material revenue growth.”
Mayer’s strategy makes sense on the surface. Tumblr is, generally speaking, a teen-dominated platform, as is YouTube. There is a certain logic to bringing video content to an extensive, pre-existing user base. And it would also be a nifty way to finally turn Tumblr into a reliable revenue stream. But, as Pando’s David Holmes points out, “elegant logic only takes you so far in the messy real world.” As the current leader in online video, YouTube is well aware that rival platforms may try to tempt away some of its young stars with the promise of more money, and the site is therefore investing millions to ensure Yahoo or other competitors can’t siphon off its talent pool.
But is this a business model, or mere imitation? Plans for Tumblr as a video platform apparently only extend to bringing in people who are already “internet famous”, with no long-term vision for nurturing home-grown talent. “When teens are looking for the next big thing, they’ll still go to YouTube first,” says Holmes.