Yahoo! made a great move buying Tumblr for $1.1 billion. Advertising will allow Yahoo! to make more money from Tumblr, and combined with Flickr, Yahoo! is definitely something to watch for. Yahoo! took on the challenge of turning Tumblr into a profit. Tumblr made about $13 million in revenue last year, but that won’t be enough to get a profit, especially since the price was $1.1 billion.
Google was able to buy YouTube back in 2006, and it has turned into a big success story. Google has profited immensely from buying YouTube. Yahoo! offered someone $1 billion for his Social Media website–Mark Zuckerberg.
Buying Facebook would have led to a huge profit assuming Facebook would have been the same either way. However, Zuckerberg turned down the $1 billion even when Facebook wasn’t the Social Media powerhouse it is today. When Zuckerberg was offered $1 billion, Facebook did not have over a billion members. By the way, Facebook now easily generates billions of dollars every year.
There are times when we have to back off and let a deal be done. Tumblr wasn’t going to make $1.1 billion in the direction it was going. Tumblr still continues to be successful, but with Yahoo’s purchase, Tumblr can be monetized more properly. There are also times when you have to stick it out and say no to a really good deal. Zuckerberg said no to Yahoo’s offer, and it was a great decision for him.
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