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Jeff Flock okay we have to get back to -- -- this this reminds me of 19992000.
When all these companies were buying up.
New start -- new younger companies to look cool so let's talk Tumblr fascinating -- high school drop out from Manhattan.
Just sold it for one point one billion dollars to Yahoo!.
So for some people who don't understand what Tumblr is and then you're just looking at is is this like a complete time eating monster.
You go on this thing and you're looking at relatively.
I don't know sometimes creative stuff that repeats itself over and over -- But it made one point one billion dollars in this -- so the blocking platform.
Allows users to post text images videos links and quotes and audio often featuring political parity.
Toddlers like text from Hillary Clinton some of you may have seen this.
Where they have -- the pictures of their kind of -- sort of thing you know gen XYZ comments -- the site -- some serious traffic several months ago but.
What -- Tumblr is like that hey girl Paul Ryan do for Yahoo!'s future.
And what's it worth the one point one billion dollar cost.
We've got two opposing opinions here Peter Cohen is Peter -- -- & Associates president and author of hungry start -- strategy.
Thinks it's a bad deal and Joseph scholar he's Cantor Fitzgerald managing director thinks Yahoo! is a good -- And has a 38 dollar price target on the stock first of all welcome to both.
Love this because it reminds me of back in the day when Yahoo! bought things like broadcast dot com for five billion dollars some of the other big names at the time but Peter.
You have a visceral negative reaction to this walk.
Well I -- -- a bunch of research done acquisitions most of them fail.
And if you want an acquisition to succeed -- -- to pass for tests and this deal sails off for those tests.
I'm so if you I can tell you what those four tests aren't why we I mean I don't want part of the screen you say it but had to articulate two -- the most important ones it failed.
Well to me the two most important ones it failed -- that the combined companies will not be better off because the company has a huge problem.
Getting revenues and advertising.
It only had thirteen million dollars in revenues its goal with a hundred million.
And a lot 25 million dollar to burn through so much cash that he couldn't even get more financing from its venture capital firms.
-- tried to sell itself to Google Microsoft.
And FaceBook and it failed.
I'm sorry and yes and Yahoo!.
Ultimately paid way too much -- So that's one big thing that's wrong.
And the other thing is that -- did it did it's losing as you mentioned it in the lead up here.
If losing customers rapidly because they don't want to be associated with Yahoo! today they've -- for something that is shrinking already even though.
The -- is still drying on a contract.
Josef I don't get its hyper about cash burn rate -- a new company because they're buying but you know Herman Miller chairs and they've got they've got to scale up but it does worry me that they didn't make a lot of money last year.
You like this deal you're calling Yahoo! will buy what.
Think it does for Yahoo!.
Besides the fact that they are actually getting an audience are they getting some real quality that could beef up more page views on the Yahoo! web site.
Brian will listen is -- expensive yes it's absolutely expensive.
Is it a must have for Yahoo! something like that such an asset like that needs to be within Yahoo!.
The -- Yahoo! was all about engagement right south Yahoo! user base even though it's 700 million.
They're engaging lesson -- would decide they're getting little older so Yahoo! needed to add a little cool to its.
It's a brand and I think.
Again -- -- set aside for a second I think it's a strategic -- for Yahoo!.
That if successful should really be a conduit for greater engagement.
Both domestically internationally.
And eventually they should be able to monetize that throughout our -- -- it's about being on the monetization.
May yeah may on the money just inside -- go ahead.
Child's just gonna sit down on monetization side their presidents of this we've seen Google -- -- to about 67 years ago YouTube was out.
Had no no PNL to speak -- we've seen FaceBook acquired instant Graham and their life is -- -- users that went crazy when FaceBook.
Acquired them and acquired the company and we're also.
This -- thing.
So we're not surprised by the reaction -- that Tumblr users this morning but I think in the long run this still could proved to be a very successful.
Deal for for Yahoo!.
OK in the long run Peter so try to see some good in all of this and tell me what women would that come from would it come -- In the fact that already Yahoo! is is making noise that it would put advertising on the dashboard of -- which is -- -- knowing people right now but I don't know how these people think the sites are gonna make money in the first place but.
I see what it brings to Yahoo! I don't see what it brings to Tumblr.
I mean what I see happening is that -- new Yahoo! makes most of its revenues -- display advertising.
-- the -- man who's made that 150 million dollars on this deal.
Doesn't like the idea of putting display advertising on Tumblr finale that but it did Tumblr doesn't even on the blogs the blogs are -- by the individual bloggers so.
If I Yahoo! wants to put advertising on those blogs.
They have to cut a deal.
Not only within my -- To permit the individual bloggers to get their permission to put the ads on there -- also -- to persuade.
An advertiser after that arrangement has been made -- and the revenue split with the the blogger has been made and persuade them that there's going to be some value in return on investment that has so that's.
Josef I'm looking -- god and I say this is not gonna work am I missing something.
Yeah what you're missing is that's exactly how YouTube works Google doesn't own any of these videos and that FaceBook doesn't own any of the the pictures are on and see Graham.
They're able to provide a platform and on -- platform.
-- suppliers and their consumers of the suppliers of content and up getting a rev share.
They end up making a lot of money and consumers and up also using the platform to fill their needs self.
I don't think this is necessarily something that from a model perspective doesn't work it's been done before again expensive yes strategic absolutely.
Well I had looking at this Yahoo!'s stock is up marginally it'll be fascinating to see how they use it and and Marissa -- the CEO of Yahoo! saying we promise we won't quote screw it -- Okay.
Listen thanks to both of you Peter started at Yeltsin offended Peter Cohen Peter S Cohen & Associates president and author of hungry start -- strategy and -- of -- he's Cantor Fitzgerald managing director.
Want to bring you both back as we look and see how Yahoo! actually tries to absorb this and make money off it closely.
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