Once again I’m sticking to the two biggest stories in tech over the last week, as they both cover off so much.
Buying Into Youth
As if it wasn’t enough spending millions of dollars on an app built by a 17 year old, it seems that Yahoo! now wants to spend $1 billion on a company which is hugely popular with 17 year olds. Following widespread reports, Yahoo! dropped the mythical amount (“You know what’s cool?“) on the social blogging platform, though it’s yet to be seen whether this will be Yahoo’s MySpace or its YouTube.
Whilst there are some good arguments being made for why this might be a bad deal (including porn & rebellious users) there are some equally compelling ones as to why it makes sense, including one suggesting that Facebook should gazump the deal. What’s not in doubt is that this is a massive roll of the dice for Yahoo and its (relatively) new CEO, Marissa Mayer.
Many thought that she would focus massively on product, but with both Tumblr and Summly, she seems to have chosen youth and content over real engineering brilliance. Whilst it’s too soon to say how that will likely play out it seems a stretch to think that advertisers will rush to associate themselves with Tumblr’s tricky audience and content (though that doesn’t necessarily mean its not worth $1 billion) whereas concentrating on doing a deal for Hulu would have made more sense (though only with the right licensing deals in place).
After all, some reports suggest that Tumblr is losing traffic and was about to run out of money whilst others hint that the deal will also, potentially, leave Yahoo a little short of cash (though others disagree). Despite all that others are suggesting that these sort of platforms are still undervalued, though the main person saying that runs… a blogging platform.
As of 3/31 Yahoo had just under $1.2b of actual cash on hand. And deal is $1.1b cash? Time to liquify that $1.8b of "short-term investments"
— Dan Primack (@danprimack) May 19, 2013
Searching For The Competition
Although it didn’t make any massive purchases in the last week, in many ways Google came out on top of most of its competitors. During the 3 hour keynote of its annual I/O conference it presented a series of product updates and innovations that left many commentators gasping for breath. It included major updates to Maps & Google+, tweaks to Search & Google Now, and lots of news about the fact that Chrome and Android will soon be, if they’re not already, the biggest browser and mobile operating systems on the market. Oh, and cash is now an email attachment.
As if this wasn’t all enough to take in, Google also decided to take on the likes of Spotify and launch its own subscription based music streaming service. Without a freemium option, or the ability to use Facebook as a launch pad, in some ways the (rather clunkily named) service Google Play Music All Access seems like less of an obvious hit than last year’s Google Glass. Whatever the case, Google seems to be shooting for the stars, whilst its main competitors are more concerned with just squeezing out the next product update.
Of course even astronauts have to come back down to earth eventually, and with continuing political and legal issues in a variety of different markets, Google could still end up on the wrong side of one of these decisions, though that is only likely to happen if legislators tighten up the rules which Google says it is playing by. In that respect at least, Google is firmly in line with its peers.
Avengers image from a Tumblr post (what else) about memes