Not Tumblr, Because Hulu And Netflix 'Would Have Been A Better Acquisition' For Yahoo!

Marissa Mayer
former President and CEO of Yahoo!

The tech sphere is moving fast, and it's moving too fast that sometimes, even experts and professionals, as well as highly-praised executives and decision makers from world-class companies and organizations cannot properly predict.

Yahoo!, the American web services provider, is one big player in the tech industry. It reigned the web way before many modern tech companies existed, and its reach was so significant in its heyday, that literally nothing could compare with its influence.

And Marissa Mayer, was the President and CEO of Yahoo!, and under her leadership, Yahoo! was still a tech titan the world feared.

But as a key decision maker in the company, she, just like anyone else, can make mistakes. And one of her biggest regrets while at the company, was buying Tumblr.

Marissa Mayer
Marissa Mayer.

In an interview with Tech Brew, Marissa Mayer said that:

"We looked at a transformative acquisition, and we bought Tumblr."

"At the same time, we were also considering whether it was possible to buy Hulu or, ironically, Netflix. And I think Netflix was $4 billion and Hulu was at $1.3 billion at the time. And either of those, with hindsight being 20/20, would have been a better acquisition."

Yahoo! had hoped Tumblr, which was founded by David Karp in 2007, would be its entry point to social media, a trend that was happening at the time.

However, Yahoo! struggled to monetize Tumblr’s user base.

Yahoo! bought Tumblr in 2013 for $1.1 billion. But the decrease in traffic made the platform a choir to maintain. By 2016, Yahoo! had written down Tumblr’s value by more than $700 million. And by 2019, after Verizon had acquired Yahoo!, even the new owner didn't want it.

Verizon sold Tumblr to Automattic, the company that owns and operates online-publishing platform WordPress, for a reported $3 million.

This is significantly less than what Yahoo! had paid for it.

In contrast, Hulu and Netflix kept going up, in which at the time, they were all climbing and worth billion upon billions of dollars.

If Yahoo! ever acquired either one of them, Yahoo! might be able to save itself from the downward spiral it experienced.

If ever Yahoo! bought either Hulu or Netflix, the case can be similar to that with Alibaba, in which its own share can be boosted, and "cursed" by the success of what it acquired.

It's worth noting, that even through Yahoo! never bought either Hulu and Netflix, the company did tried its chance in the streaming service business with what it called "Yahoo! Screen," which created shows like Sin City Saints and Other Space, as well as picking up a sixth season of the NBC-cancelled sitcom Community.

It was launched in 2006, but in 2016, following a $42 million write-down on the poor performance of its original content, Yahoo! Screen was shut down. Later that year, Yahoo! announced a partnership with Hulu to move its free video library to Yahoo! Screen's successor, Yahoo! View.

Yahoo! View still didn't get the traction it needed and because of that, it was decommissioned on June 30, 2019.

Read: The Cursed Diamond Yahoo! Owns

Mayer also said that the other two regrets she had as Yahoo!’s CEO was hiring Henrique de Castro as the COO instead of Lisa Utzschneider, and not making "the tax-free Alibaba spinoff to separate the assets of the company."

"If we had done that, it would have saved $10 billion for our shareholders or made them that money, whichever way you look at it, in taxes that were paid. And two, it would have allowed Yahoo! to continue as an independent company, and it would have potentially had more success."

Yahoo!, the company that is headquartered in Sunnyvale, California, is the provider of a web portal, the search engine Yahoo! Search, and related services, including My Yahoo!, Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo Sports and its advertising platform, Yahoo! Native.

Yahoo! was founded in 1994 by Jerry Yang and David Filo, and was one of the pioneers of the early internet era in the 1990s.

At that time, some older generations even used Yahoo!'s search field to go to Google. In other words, there were people who literally "Yahoo!-ed" the term "Google" to go to, suggesting how massive Yahoo! was before pretty much everything, even with web browsers.

Its decline happened shortly in the year 2000, after the tech bubble burst, and after Google was founded and Facebook was founded.

Before reigning at Yahoo!, Marissa Mayer was an early employee at Google, and was once a former lover of Google co-founder, Larry Page.

After leaving Yahoo!, she co-founded a startup called Sunshine that creates AI-based apps, including a contact manager.