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Why Tumblr Was a Massive Steal for Yahoo - Adam Rifkin - Voices - AllThingsD

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Great post by @ifindkarma on $YHOO's acquistiion of Tumblr.

After reading my recent thoughts about why Tumblr is so valuable, Josh Elman of Greylock Partners made a most astute observation: Everyone’s Facebook feed is pretty much the same as everyone else’s of the same age. Twenty-year-olds pose in the club, 30-year-olds share wedding photos, by age 40 you’re looking at a lot of cute pictures of your friends’ kids. But with Tumblr, you never know what you’re going to get — even with people you know personally. That, in a nutshell, is the difference between a social graph and an interest graph.

Also, those who have only worked on social graphs might not fully grasp how much more usage you can build in the long run by allowing for anonymous, non-social browsing. If you have good content that is meaningful to readers who do not know the writers personally, you are leaving money on the table — and increasingly alienating your potential userbase — by forcing a social graph that doesn’t need to exist.

Recently, a rash of apps learned firsthand about the heartbreak of exponential growth followed by exponential decay on social graph platforms. Josh Elman opined that the fundamental strategic flaw of these startups was a failure to move users rapidly enough from the Facebook platform to the standalone Web experience, but that’s missing a gigantic step in the logic of value creation. The apps that shut down had failed to develop enough of a standalone experience for users to have any reason to move over. Fundamentally, their content was just not valuable outside a narrow social, temporal and platform context and therefore moving users to a standalone site would have been pointless.

I had been hearing a lot of negativity about Yahoo's decision to buy Tumblr.

This article scratches the surface on some implications people were missing.

Thank you for sharing it!

I had no idea that Tumblr has that kind of revenue potential... Really well written, informative and fun to read :-)

Pandawhale is kind of a lot like Tumblr actually. Interest based content containing funny and also more serious stuff, with excellent SEO and a userbase that has high revenue potential for targeted content.

Thanks Arthur -- it's true that we respect Tumblr and are influenced by them and their business model.

I love this insight "you will invariably respect your friends somewhat less when your nose is rubbed in the fact that they enjoy cake pops or boxing; but you enjoy your interest graph more if the writers occasionally betray a trace of humanity."  I still respect you after this article, Adam. :-)

Thank you, Ernie. Mission accomplished!

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