Yahoo is going to buy Tumblr for $1B on Monday according to reports.
I will explain to you why the media is freaking out, why big companies need to make more bets like this, why Yahoo is the perfect home and why Zuckerberg should offer $2B.
Media... Freak Out!
Over 20 years in the industry I’ve learned that when something gets bought for $1B or more, people tend to freak out.
People can comprehend millions of dollars, because we all know folks who have a million or more dollars (or homes worth that). When you start talking about 100s or 1,000s of millions, people get emotional and some start lashing out.
Journalists are one of the first groups to lash out. Why? Because they have no chance of making big money in their jobs, and they have to fight for $5k raises while their pensions are replaced with 401ks. Also, they tend to have covered startups like Tumblr from year one and they can’t reconcile how something that didn’t exist five years ago is now worth $1B -- and that they don’t have to balls to create something.
F@#4k it, Yahoo Should Buy 10 Tumblrs
Here’s the truth: a billion dollars is nothing to a company like Yahoo or Google or Facebook or Apple or Microsoft.
If there were 10 startups like Tumblr, with 100M+ users and $50M-$100M in revenue potential a year, it would actually make sense for Google, Yahoo or Facebook to buy all 10.
Roll the dice.
Because those companies have tens to hundreds of billions of dollars in market cap and cash, and if one in 10 of those startups turn into YouTube, it’s worth it.
Read the complete editorial on LinkedIn here.
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