When Slow Corporations Take Over Swift Startups


One day the good old Yahoo has taken over the fresh and popular blogging community Tumblr.

I was thinking for a while what it means. I took a deep breath.

Then I recounted other similar mergers in the past and their outcome.

I don’t mean just to talk about Yahoo and Tumblr.

No, I’m talking about what happens when slow corporations take over swift startups.

I’d like to summarize my evident thoughts an Yahoo and Tumblr nonetheless first.

In case you are interested in the more general analysis of such a process scroll down.

Yahoo’s Track Record of Ruining Startups

Yahoo doesn’t have a positive track record of acquisitions. Just think of the most prominent ones like

  • Geocities
  • Delicious
  • Flickr

In all these cases the services have been neglected for years with dramatic results.

The free hosting service Geocities has been left to rot until it was only a cemetery of sites.

Then Yahoo has killed off the homepage service overnight.

They destroyed years of work by simply deleting all the millions of remaining sites leaving the Web with a myriad of dead links.

They let Delicious, the original social bookmarking service – probably the first real social media site (back then still called del.icio.us) – decline for years.

It became so stale that they have sold the site for a fraction of the sum they have bought it for.

Delicious is dead by now despite having been bought by a fast moving outfit. It was simply neglected for too long. Also

the brand has been hurt by a Yahoo leak

It fueled fears of them closing down the service. Thus a large number of faithful users fled it.

Yahoo did not close or sell Flickr but the photo upload and sharing service hasn’t been updated or relaunched until recently for several years either. Update: they sold it by now.

Flickr has been additionally hurt by a censorship scandal. I remember myself writing a list of the top 10 Flickr alternatives back then.

It’s not just Yahoo. Do you remember when Google took over YouTube, heck even Blogger?

Have you been there when Ebay acquired StumbleUpon or PayPal?

Did you notice the changes? I did.

What Happens When Corporations Acquire Startups?

Well, the Internet is a fast changing environment. Either you are changing faster than the Web to be ahead of the pack.

Otherwise you are at least quick enough to adapt to changes you are facing from outside. Most large corporations are very slow by definition.

Like dinosaurs they are so huge they can barely move. I know it first hand because I have worked for the likes of Siemens, Adidas even before I was into SEO. I had built websites for them.

As a search engine optimizer I faced huge problems when working with large brands.

I can’t even name them here because by then I was obliged to sign so called NDAs (shut up notices) even before starting to talk about the project with the prospective clients.

I got mostly contacted by agencies from outside of Germany who wanted me to work for their corporate clients from the

  • US
  • UK
  • EU
  • Russia

and the likes. I don’t accept such anonymous outsourcing jobs anymore because they make no business sense for me but I had to learn the hard way.

You always get impressed by big names just to find out later how awful they are not only about SEO but in general business wise too.

In most cases I didn’t even speak to a representative of the actual corporation but only to the agency.

Even in case I did they were always several departments involved so even a tiny change required humongous coordination efforts.

Corporations Love Outdated Business Practices

For example some required me to “optimize their meta tags”, a task that by itself was a sign of the outdated SEO practices they have been using.

Feedback from me saying the they don’t need “meta keyword tags” anymore wasn’t welcome and got completely ignored.

Once I started translating their meta descriptions they were bound by their internal guidelines written for the English version so I wasn’t able to really optimize them.

I had to translate the terms into German 1 to 1 even in cases where the keywords didn’t have any market demand in Germany or were the terms did not even exist in German!

Now imagine such a grotesque corporate giant trying to move fast enough to adapt to the actual Web environment.

Also large corporations are not here to help people or do something amazing on most cases. They just need profits.

It’s completely irrelevant whether the people like them or not, the products are good or not, their employees get a living wage etc.

In most cases corporations simply try to dominate a market.

Then leave consumers with no real choice. Just think

  • Microsoft with Windows
  • Google with search
  • Apple with iTunes

These products are not the best ones, they are just the ones most people use by now.

They were innovative at the beginning so people adopted them initially.

They they dominated their markets, created gated communities you can’t escape from easily and now get worse and worse over time.

From time to time a startup is founded with a lot of enthusiasm and fulfills a true market demand the dinosaurs were to slow and complacent to even notice.

Take a look at blogging now. While WordPress grew cluttered and complex, Blogger turned stale.

Tumblr re-invented blogging by making it as simple as possible and creating a community around it.

Tumblr is as simple as using Facebook but you can create a whole new identity for yourself, or even a 12 identities.

Tumblr is by now huge itself and has a few major issues like

  1. pron
  2. content theft
  3. monetization

There are several services that already partly replace Tumblr, tools like

  • Pinterest for image sharing
  • Instagram – a navel gazing and image based social networking
  • Unsplash for sharing and publishing your photos for free

Already there have been ads introduced on Tumblr within the content stream itself on behalf of Yahoo.

Tumblr does not remunerate publishers or even allow them to make money with their blogs.

Also the proprietary format of Tumblr posts makes it difficult to import the content and republish it elsewhere.

The Lawyers and the Accountants Take Over

The corporate execs of Yahoo can take care of the issues above and others like anonymity as well. Why?

It’s because once a corporation acquires a startup the lawyers and the accountants take over. The goal shifts from making users happy to making higher profits.

It’s not not about a cool team anymore it’s about a hierarchy with bosses and wage slaves. It’s not about fun anymore it’s about work.

The only thing that moves fast is enthusiasm until it’s gone for good.

As a user I can only advise you to move on where the enthusiasm went as otherwise you might end up investing time and effort into a dying service.

Well, YouTube is still huge you might argue. Just look at YouTube from Germany.

For a decade half of the videos were unavailable here because they contained some copyrighted music.

It still applies to many if not most movies.

Google didn’t want to pay German rights holders so the whole country banned altogether as viewers.

The YouTube interface is still roughly the same as years ago while a site like Vimeo is all new and shiny.

Personally I still have a private blog at Tumblr but I probably won’t wait as long as I did with Delicious.

More insights and analysis on the Tumblr take over by Yahoo:

  1. Flashback: How Yahoo Killed Flickr and Lost the Internet
  2. If Yahoo Buys Tumblr, What Will It Do With All That Porn?

Not surprisingly Yahoo has degenerated even further ever since amid catastrophic privacy and security scandals. What’s the end of the story?

Ironically they got taken over itself for cheap by the venerable Internet service provider Verizon.

They also acquired AOL so that the old gatekeepers meet under a new roof.

Tumblr’s Happy Ending

This might sound like a sad story full of drama and the proverbial “doom and gloom”.

Yet sometimes it’s opposite. Tumblr actually experienced a happy ending.

After Yahoo almost ruined it and got acquired itself among other brands like AOL etc. Tumblr got sold again!

Tumblr was a mere shadow of itself by then. My two Tumblr blogs have been hijacked by spammers!

Yet some die hard blog enthusiasts came to the rescue!

The WordPress makers of Automattic saved Tumblr from disappearing into oblivion in 2019!

Woohoo! And you know what? The service improved again ever since.

I was even able to recover my main user name – onreact.

You can view my Tumblr blog on onreact.tumblr.com ever since.

Sadly the community is much smaller now and engagement is low.

Yet I’m also not as young and energetic as I was back in 2010 when I started my first Tumblr blog.

Also Tumblr has been losing money ever since so that Automattic had to reorganize the service at the end of 2023.

* (CC BY-SA 2.0) Creative Commons image by m01229