Last month, Yahoo’s CEO Marissa Mayer, had decided to integrate their sales team with Tumblr. And now just a month later, they are already ditching that plan. And will keep Tumblr separate, something that Mayer promised when the sale of Tumblr was official in 2013. Yahoo has been seeing their profits drop, and even posted some pretty mediocre results for the fourth quarter of 2015. When reporting their quarterly results they also noted that they were putting themselves up for sale. Giving Verizon the reason to evaluate a purchase of Yahoo or at least part of Yahoo. Mainly their sales and advertising part of their business, which would work great with AOL and their Go90 video service.
When the initial plan of combining the Yahoo Sales team and Tumblr team together was announced, many Tumblr employees weren’t too happy. Feeling that it broke the promise that Mayer made in 2013, and also that it wouldn’t work out as well as they had hoped it would. It also created some confusion within Yahoo, as well as some power struggles, as you’d expect. Tumblr had seen some pretty good growth since being acquired by Yahoo. Their sales team went from 18 individuals to around 80. Their sales also expanded to Asia and Europe since being acquired.
The big problem for Yahoo and Tumblr is that you’re looking at two different audiences and that’s just not going to work for sales and monetizing Yahoo as well as Tumblr. So ditching this plan is going to help out Tumblr, but maybe not Yahoo as much. We’ll have to see how things play out in the next few months. However, Yahoo needs to do something to raise their revenue, as they are already looking at laying off a good number of employees. Mayer is still saying that Tumblr’s number one priority is to grow their user-base. Which makes sense, as that is their gateway into getting new users, and younger users at that. Something that Yahoo desperately needs. Tumblr’s current user-base is around 550 million and about 80% of that user-base is on mobile. A big area for Yahoo, who has a number of mobile apps already available for both Android and iOS.