YouTube Screenshot / nextagendaFormer Yahoo CEO Tim Koogle, the man who bought GeoCities.As everyone in the world weighs in on Yahoo’s acquisition of Tumblr, some snarkers are dismissing the deal as just another GeoCities.
In early 1999, Yahoo bought a company called GeoCities.
Back in the 1990s, GeoCities was a popular site that allowed people to create their own web pages. GeoCities was a relatively big site in those days, and the Yahoo-GeoCities deal was a relatively big deal.
GeoCities’ time in the sun came and went quickly, however. A few years after the acquisition, Yahoo shut down what was left of it, and most of the purchase price turned out to be wasted.
What those who are dismissing the Tumblr deal as “just another GeoCities” are forgetting (or ignoring), however, are the specifics of the respective companies and deals.
- Yahoo paid $3.5 billion for GeoCities–more than 3-times as much as the $1.1 billion it is paying for Tumblr.
- Tumblr is more than 15-times as big as GeoCities was when Yahoo bought it. Tumblr has 300 million global uniques. GeoCities had 19 million.
In other words, Yahoo is paying one-third the price for a company 15-times as big.
Yes, it’s true, Yahoo’s Tumblr deal might end up flopping. That’s a risk that goes with all acquisitions.
But the above facts alone are a pretty good indication that the Tumblr deal, however it turns out, is not just “another GeoCities.”SEE ALSO: Way To Go, Yahoo! Way To Throw The Long Ball!
Business Insider Emails & Alerts
Site highlights each day to your inbox.