SAN FRANCISCO (Reuters) – Yahoo Inc announced on Monday it would shell out $1.1 billion to buy blogging service Tumblr, in a bid to revitalize its brand and attract a younger generation of users.
Yahoo has been criticised for making big acquisitions that have not always reaped lasting returns.
Under CEO Marissa Mayer, the Internet search company has snapped up numerous small startups in recent months, hoping to gain an edge in mobile, bring new talent on board and improve existing services.
Here are notable acquisitions since the heyday of the first dotcom boom:
In 1999, Yahoo bought Geocities – a free service that hosted personal home pages for consumers and once ranked among the most-trafficked websites – for $4 billion-plus. Yahoo pulled the plug on the site in 2009, making the purchase one of the company’s most glaring acquisition failures.
Shortly before the dotcom bubble burst, Yahoo picked up the Internet radio company for more than $5 billion in 1999. While a win for tech entrepreneur and Broadcast.com founder Mark Cuban, industry watchers have said the exorbitant deal flopped as it did not deliver a return on investment.
The photo-sharing network joined the Internet company’s list of acquisitions in 2005.
Since taking the reins as CEO in July, Mayer has invested in giving its Flickr video and photo-sharing service a facelift to compete with rival products like Facebook’s Instagram.
Industry watchers say Yahoo did not give social media pioneer Flickr the attention it deserved early on, losing out to Facebook and Twitter that now dominate the social media space.
Terms of the deal were not disclosed, though some publications reported that Yahoo paid about $35 million.
Yahoo purchased a 40 per cent stake in China‘s largest e-commerce company for $1 billion in 2005, a deal considered to be one of the search company’s most lucrative investments.
It now owns about 24 per cent of the privately held company, which is widely expected to seek an initial public offering as early as this year. Some analysts say the company could fetch a valuation as high as Facebook’s $100 billion.
The online ad exchange came onboard in 2007. Analysts had speculated that Yahoo was looking to sell off the platform it purchased for a reported $850 million last year. But the company, now under Mayer‘s watch, has said it is not for sale.
Summly, Jybe, OnTheAir, and others:
Media buzz around the deal turned the spotlight on D’Aloisio. Some reports, however, criticised the deal saying a vital part of Summly’s technology was not developed by the wunderkind but licensed from a non-profit research group called SRI International.
Terms of the deal were not disclosed, though technology blog AllThingsD reported that Yahoo paid roughly $30 million. Yahoo’s new mobile app offers news summaries adopting Summly’s technology.
This year, Yahoo also acquired online video platform OnTheAir founded by former Google and Apple employees; and mobile recommendation startup Jybe founded by former Yahoo staff.
In early May, Yahoo’s plans to buy a 75 per cent stake in the online video-sharing site, owned by France Télécom SA, fell through after it was rebuffed by the French government that wanted the site to remain wholly French-owned.
Yahoo bought Tumblr, one of the Web’s most popular hubs of so-called user-generated content, for $1.1 billion in cash, in an effort to establish a presence in the social media space.
(Reporting by Malathi Nayak; Editing by Jeremy Laurence)
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