The latest article on ‘The Forrester Blog’ is titled “Top Questions for Yahoo About Its Tumblr Acquisition”.

Zachary Reiss-Davis says, “Now that Yahoo has announced its acquisition of Tumblr for $1.1 billion in cash — about a quarter of its cash reserves — the top three questions I see are:

  • How will Yahoo manage to retain, and grow, the Tumblr user base while monetizing it? Today, Tumblr is quite unprofitable, and its lack of advertising is one of the many attributes that have made it popular. Yahoo has a very difficult balancing act ahead: It has to keep Tumblr’s current active user base passionately engaged and spending time on the site, while also finding a way to add advertising and other revenue sources. Marissa Mayer, Yahoo’s CEO, stated the ads will be “very light” and “really fit users’ expectations”; however, Ken Goldman, Yahoo’s CFO, added that Tumblr should “materially contribute to revenues” in 2014 and beyond. If users do not stay with the service, they will have bought a ghost town”.

Top Questions for Yahoo About Its Tumblr Acquisition

The Forrester Blog

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