So, the rumors in the Big Apple are true! Yahoo moves back to the top table of social networking when it announced the acquisition of Tumblr - the social media micro blogging platform.
Tumblr is six years old and has over 108 million users, making it into the top 50 websites in the world (according to Alexa). Back in 2011, the company gained fame by hosting President Obama's personal blog.
Like Instagram, Tumblr has received a boost from the huge increase in ownership of smart phones which allows fast uploading of video and photo content. It has also become very popular among the adult entertainment community. Its valuation of over $1 billion is based on potential, rather than actual revenue streams, again similar to the situation where Instagram were in, prior to their purchase by Facebook for $1bn in April 2012.
It seems that the domain speculators were already on the case, with domain names like Yahootumblr.com and Yahootumblr.net were registered in the past few days (although hyphened versions are still available at the time of writing). This is the catch-22 situation for companies who are involved in high profile mergers. Any rumors are fueled by activity in the domain name registration market, whether it be by one of the companies themselves, by proxy or through a speculator. If an organization hasn't had the foresight to register the domain names themselves, then it could be an expensive domain acquisition process to obtain the registered domains from the domain speculators. This is why the big brands invest in a strategically thought out corporate domain name strategy in to their business plans.
The Yahoo deal announced today will be considered as another tech start up company that was acquired by one of the "big boys". All eyes will now turn to Pinterest - the long time darling of the social networking industry that still retains independent. Although… someone has already registered googlepinterest.com. So let’s watch this space, again…
Written by Stuart Fuller, Director of Commercial Operations and Communications
20 May 2013