Why Yahoo Bought Tumblr: It’s All About Young Women

The news broke this morning that Yahoo, which had been discussed as a potential buyer for Hulu, the streaming video portal set up by the broadcast networks, decided to make another investment instead. For $1.1 billion, up from a valuation of $800 million in September 2011, Yahoo has purchased the microblogging and social networking site Tumblr.

One of the reasons Yahoo bought Tumblr is simple: it was available. Facebook bought photo-editing-and-sharing app Instagram last year, a move that made sense given Facebook’s focus on social distribution of information, particularly of images. The bulletin-board service Pinterest pulled in a $200 million round of funding in February, but it’s not clear that the company would be open to a sale, or even if it were, that Yahoo would have been interested in the business model, given the uncertain path from getting revenue out of Pinterest. Various estimates seem to be putting Twitter’s value between $9 and $10 billion, and the company seems more likely to opt for an initial public offering than to sell out to another social media or internet company. Facebook’s IPO is a year old. Of the large social media companies examined by the Pew Internet and American Life Project, that left Tumblr as the property available to Yahoo if it wanted to buy another popular service.

But even if there had been another appealing property on the block—and speculation continues to swirl about whether another company will buy Hulu—Tumblr would still have been appealing for two reasons, one a hard figure, one a perception. The first is that 13 percent of internet users aged 18-29 told Pew that they use Tumblr, a figure that suggests that an enormous number of Tumblr users could be coming online in coming years. The second is the perception that Tumblr is a female-driven service. That isn’t quite accurate. That same Pew study found that 6 percent of both male and female internet users report that they’re on Tumblr, though the sample Pew used is slightly weighted towards women, surveying 956 women out of 1,802 total respondents. But whatever the actual numbers, the perception is that Tumblr has a female-heavy user base (as well as a strong LGBTQ one).

So when Yahoo CEO Marissa Mayer talks, as she did this morning on the call that announced the deal, about the fact that “Tumblr views itself as a home for brands,” like movies, or suggests that Tumblr and Yahoo could work together the way Google and Blogger did, with Yahoo serving ads on Tumblrs whose users would like to have ad placement, she’s talking about getting ads in front of young users, and monetizing content by young people. And whether it’s true or not, the perception will be that Mayer specifically means getting ads in front of monetizing content created by female and non-straight young people.

Whether that means that the oft-mocked confessionals and .GIFs of Tumblr will come to be seen as respectable because they’re something Yahoo is going to try to make money off of is a different question entirely. Yahoo’s perception that young people will help it shore up its aging brand, and that they’ll be valuable to advertisers isn’t actually much different that the insight that young women be shopping. Sometimes, the very fact that young people, particularly young women, have money to spend is the thing that makes them seem ridiculous to the very people who would like to extract that money from them. Trendhopping that necessitates regular consumption and deep engagement on things that other people have deemed frivolous are traits that make consumers or users valuable to advertisers. But the assignment of financial value to those behaviors has never meant that we pass along any more deference to young people’s tastes as part of a larger bargain.