Yahoo might admit $1.1 billion Tumblr mistake (YHOO)
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Yahoo could soon issue a major mea culpa with regard to Tumblr.
Yahoo paid $1.1 billion to acquire the microblogging and social networking platform and already wrote off $230 million of that amount last month, but now the company could write off the entire value.
The company's annual 10-K filing intimates that it could reevaluate "some portion or all of the remaining goodwill" that it paid for Tumblr. Goodwill is the amount paid for a company in addition to the total value of its assets and liabilities, and Yahoo spent $750 million in goodwill for Tumblr.
Yaho CEO Marissa Mayer had expected Tumblr revenue to hit $100 million in 2015 but said in the latest earnings report that it did not hit that mark.
User growth has also been a problem for Tumblr. When Yahoo bought the platform in 2013, it had 260 million users, and that number has grown to 400 million. By comparison, Facebook bought Instagram in 2012, and its user base has grown from 30 million at that time to 400 million today.
Tumblr has encountered several problems since Yahoo purchased it, including a failure to effectively integrate the two companies' sales departments, a failure to gain any traction for Tumblr on mobile, and a failure to secure advertisers.
Margaret Boland and Robert Elder, analysts at BI Intelligence, Business Insider's premium research service, note that part of Yahoo's problem was that it did not understand Tumblr's unique culture, as evidenced by the combination of the two companies' sales teams. Furthermore, Yahoo and Tumblr cater to different advertisers and different audiences.
This situation shows how crucial it is for social media companies to understand their audiences. This report on social media demographics from BI Intelligence unpacks data from over a dozen sources to understand how social media demographics and preferences are still shifting.
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Here are a few of the key takeaways from the BI Intelligence report:
- Pinterest has tremendous reach among women. Among US female internet users, 42% reported being on Pinterest in Pew's late-2014 survey, compared to only 13% of men.
- Instagram has become the most important and most-used social network for US teens. 32% of US teenagers cited it as their most important social network in Piper Jaffray's twice-annual teen survey, compared to only 14% saying that of Facebook.
- Snapchat, Vine, and Tumblr had by far the most youthful user bases of the social networks we looked at. 45% of Snapchat's adult users are between 18 and 24, followed by Vine (28%) and Tumblr (28%), according to comScore.
- LinkedIn enjoys high adoption among highly educated and high-income users. LinkedIn is used by 44% of Americans with income of $75,000 or more, according to Pew.
- Messaging apps also have become more broadly popular, but still skew young: 7% of all people in the US aged 12 and older use WhatsApp, according to the Edison Research and Triton Digital survey.
- The aging of Facebook, Twitter, LinkedIn, and even Pinterest is more apparent than ever. That's especially true of Facebook: Less than two-fifths of Facebook's adult user base in the US is aged 18 to 34, according to comScore.
In full, the report:
- Looks at overall social networking adoption in the US and globally
- Assesses the most important demographic skews at the top social networks, including Facebook, Snapchat, Twitter, Instagram, LinkedIn, Pinterest, YouTube, and Tumblr
- Examines the rise of image-sharing social networks like Instagram and Snapchat
- Compares how demographics have changed over time as older social networks have matured
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