Make us your home page
Instagram

Yahoo can't decide whether it's a media company or a tech company

Yahoo's acquisition of Tumblr for $1.1 billion is a big gamble by Marissa Mayer, the company's recently hired CEO. The microblogging site is a valuable asset, but media accounts of Mayer's thinking suggest she hasn't come to terms with Yahoo's fundamental dysfunction: that it can't decide whether it's a media company or a technology company.

The most successful software companies, including Microsoft (in its prime), Google and Facebook, have focused obsessively on recruiting the best programmers. In contrast, even in its early days, Yahoo viewed content as a generic commodity to be packaged and resold to advertisers.

That ambivalent attitude toward technology was one reason Yahoo lost its dominance of the search market early in the last decade. And it explains why Yahoo failed to capitalize on the early popularity of Flickr, which Yahoo acquired in 2005 and has done little to improve since then.

Hiring Mayer away from Google was supposed to rejuvenate the company. Yahoo's board hoped Mayer, a computer programmer who had been immersed in Google's hacker-centric culture for more than a decade, would bring some of Google's cultural strengths with her to Sunnyvale.

But media reports of Mayer's thinking about the Tumblr acquisition suggest that Yahoo's culture may be rubbing off on Mayer more than vice versa. According to AllThingsD, which broke the news of the transaction over the weekend, Mayer became interested in Tumblr because it was "just the kind of property that Yahoo needed to make it both 'cool' and relevant to new consumers."

This is media company thinking. Media companies build brands by associating themselves with hot cultural trends. Because these trends are fickle, media companies can't do much more than observe which way the crowd is moving and race to get in front of it.

In contrast, technology firms build strong brands by creating technology that is objectively superior to other products on the market — for everyone.

Tumblr's current "cool" factor is a reflection of the fact that it's the best product on the market for a certain style of blogging. If it can maintain that technological edge, it's likely to continue growing. If it stagnates technologically, then its popularity will atrophy, as has happened with Flickr and del.icio.us.

Mayer says she will give founder David Karp autonomy to continue operating Tumblr as an independent entity. That's probably wise, as it will avoid smothering the company in Yahoo's bureaucratic culture. But that may be easier said than done. Part of Tumblr's charm is its minimalist design and simple user interface. Yet part of Mayer's argument for the acquisition is that Tumblr can benefit from integration into Yahoo's personalization, search and advertising platforms.

The much bigger challenge would be to transform Yahoo itself into a company that takes technology seriously. In her news release announcing the merger, Mayer wrote that "Yahoo is the Internet's original media network. Tumblr is the Internet's fastest-growing media frenzy. Both companies are homes for brands." Mayer's vision of Yahoo as a media network and a "home for brands" suggests Yahoo won't be producing great software products like Tumblr anytime soon.

Highlights of Yahoo's history

Daily stock price, adjusted for splits and dividends

Yahoo can't decide whether it's a media company or a tech company 05/20/13 [Last modified: Monday, May 20, 2013 10:16pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Washington Post.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  2. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  3. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  4. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county

    Water

    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.
  5. Honda denies covering up dangers of Takata air bags

    Autos

    With just a third of the defective Takata air bag inflators replaced nationwide, the corporate blame game of who will take responsibility — and pay — for the issue has shifted into another gear.

    Honda is denying covering up dangers of Takata air bags. | [Scott McIntyre, New York Times]