Yahoo has promised "not to screw up" Tumblr now that it has acquired the freewheeling blogging site. But there are still several ways Tumblr could get better, and worse, as a Yahoo-owned company.
On the bad side, there's the threat of excessive advertising.
"Tumblr has been unprofitable, and Yahoo has to figure out how to monetize it," said Forrester Research analyst Zachary Reiss-Davis.
"But it has to incorporate ads tastefully," he added. Failing that, Yahoo may not have much of a user base to advertise to. Matt Mullenweg, the founder at rival blogging site WordPress, has already reported a massive uptick in its blog post import rate from Tumblr.
Ads do currently appear on Tumblr in the form of sponsored posts within users' feeds, but they are far from being ubiquitous. Sponsored posts have only been on the desktop version of Tumblr for about a year; mobile ads only just rolled out last month.
There's also the question of whether Tumblr's culture of open-ended creative expression will mesh with Yahoo's corporate environment. Tumblr's content is entirely user-generated, and there's fear that Yahoo's involvement could, in essence, cramp users' style, despite the fact that Yahoo said the site would remain independent.
"Anything Yahoo does to limit that [self-expression] could be detrimental," said Forrester's Reiss-Davis.
Cultural integration between the two companies, or more specifically a lack thereof, could also have a negative effect on Tumblr and possibly lead to user abandonment. Tumblr has a hip, youthful startup mentality, whereas Yahoo is a large corporation that has seen brighter days, said Brad McGee, co-founder at iCrowd, which pairs entrepreneurs with investors.
"Tumblr is a trendsetter, while Yahoo is kind of the opposite," he said.
"There's a disconnect here," he added.
Yahoo users tend to be older and less hip than bloggers on Tumblr, so finding a way to cross-fertilize the companies' respective audiences will be a huge challenge, McGee said.
But there are also several ways Tumblr could get better following the deal. Yahoo's size could help to grow Tumblr, which hosts more than 108 million blogs and has 175 employees. This is the line Yahoo pushed in its announcement of the acquisition.
"Tumblr can deploy Yahoo's personalization technology and search infrastructure to help its users discover creators, bloggers and content they'll love," Yahoo said.
There may be some truth to that statement. "This is a great example of two companies chasing the network effect," said iCrowd's McGee. "Yahoo has the audience, while Tumblr has the content," he said.
Yahoo's traffic provides "a shot of adrenaline to Tumblr," he added.
The deal could also expose Tumblr to a more diverse set of users who may otherwise be less willing to adopt new social technologies, echoed Forrester's Reiss-Davis.
But will Tumblr users begin to adopt Yahoo's services? "That I'm not so sure about," said McGee.
Yahoo confirmed Monday morning that it had acquired Tumblr for US$1.1 billion in cash, after a weekend full of rumors and speculation. The deal is expected to close in the second half of the year.
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