A million dollars isn't cool. You know what's cool? A billion dollars.
This is a line from a Hollywood movie that is so overused as to be, at this point, decidedly uncool. But it is also a line from a Hollywood movie whose truth has just been proven, empirically, in the real world. The cultural value of a billion dollars, the flip side of startup-flipping, now has hard evidence -- in the form of the acquisition deal Yahoo just made with Tumblr. Yesterday's hot Internet company, the Wall Street Journal reports, has officially purchased the popular microblogging site for a cool $1.1 billion.
The experts who have been analyzing the tech world's latest snapped-up-startup story may disagree as to the benefits the union will produce; it's a deal whose logic may well come down to web traffic. (Tumblr gets more than 300 million visitors a month, Yahoo claims.) It may come down to the native ad capabilities that Tumblr offers to Yahoo's advertising business. It may come down to Tumblr's increasingly urgent need for cash. Or to, most likely, a combination of those and many other things.
What the experts seem to agree on, though, is the thing Yahoo will be formally acquiring with its cool billion: coolness itself. (Dot-tumblr-dot-com.)
- "According to numerous sources," All Things D reported, Yahoo CEO Marissa Mayer "determined quickly in her research that the site was just the kind of property that Yahoo needed to make it both 'cool' and relevant to new consumers."
- Quartz eschewed the scare quotes, but concurred: With the Tumblr acquisition, "Marissa Mayer has made her first major move to try to make Yahoo cool again."
- USA Today agreed ("In Tumblr, Yahoo picks up the type of cool technology that people once associated with Yahoo, says technology analyst Kevin Lee").
- So did Henry Blodget ("Yahoo buying Tumblr makes sense. Tumblr is only big, cool, newish social platform that Yahoo can afford").
- And Techcrunch ("There's a certain amount of 'cool' that's attached to Tumblr, and Yahoo is desperate for exactly that").
- And Mashable ("You know how there are some people that just ooze coolness? No matter what they do, what they wear or how they act, they are just cool.... Web sites and services are like that too. From virtually the day in launched in February 2007, Tumblr has had the cool factor").
The assumption is clear: Coolness, here, is currency. Mayer is publicly positioning Yahoo, essentially, as the Cady Heron (or the Laney Boggs, or the Baby Houseman, or the Eliza Doolittle) of the Internet: a character who will realize her native potential through the socially transformative power of the makeover. And Mayer is willing to pay, handsomely, for the transformation. "There was a kid in my high school who used to buy the popular kids lunch so he could sit with them," Techcrunch's Alexia Tsotsis wrote. "Yahoo has become that kid."
The catch, of course, is that the Internet, guided as it may be by young people, is not a high school cafeteria. And Yahoo is not a kid learning the heart-warming lesson that being true to herself is the best way to fit in with others. So how does coolness, as social capital, actually convert itself into currency?
The answer is that it doesn't. Yahoo may well have bought Tumblr to "court a younger crowd"; that is not the same thing as simply buying coolness. Tumblr may well bring to Yahoo the youthful demographic that advertisers love; that also is not the same as buying coolness.
And that's the real challenge Mayer and her team at Yahoo will face as they go about justifying their billion-dollar acquisition: How do you preserve the coolness of Tumblr while benefiting from the coolness of Tumblr? How does Tumblr -- winky, quirky, porny -- stay Tumblr-y when it's owned by Yahoo? If you're buying the community to build your brand, how do you keep the community around to do the building? How does the young adult keep his independence when he's moved back in with his parents?
For users, the ideal scenario would involve Yahoo treating Tumblr in pretty much the same way Google has treated YouTube: as a property whose interface is integrated with the mothership in the subtlest manner possible. It's easy to forget, given YouTube's interface, that Google owns the service; and that is, of course, a strategy rather than an oversight.
The good news -- for Tumblr users and for Yahoo -- is that Mayer seems to be taking a tip from her old employer in this regard. She is making a point of emphasizing the ongoing independence of Tumblr. "We promise not to screw it up," she said in her (yep, Tumblr-based) announcement of the acquisition this morning. "Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently. David Karp will remain CEO. The product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve. Yahoo! will help Tumblr get even better, faster."
If Mayer is to preserve Tumblr as Tumblr -- if Yahoo is to keep and thus reap the branding benefits of its "coolness" -- she'll be fighting not just Yahoo's commercial interests (Sell Ads! Sell Ads! Sell Ads!), but also the cyclical forces of history. In his book The Master Switch: The Rise and Fall of Information Empires, the legal scholar Tim Wu observes a trend that unites every major information technology of the 20th century: its transformation from, basically, "cool startup" to "stodgy industry." That evolution, he notes, defined radio, and film, and telephony, and television, turning these innovations from the provinces of creative tinkerers into the corporate behemoths we're familiar with today.
The Yahoo-Tumblr deal is, on the one hand, simply your standard-issue corporate acquisition. But it could also be a microcosmic corollary to Wu's notion of "the Cycle": By joining Yahoo, Tumblr risks becoming another data point in favor of the inevitability of consolidation: yet another creative, quirky endeavor transformed, by business interests, into something that barely resembles its original form. A community converted into a commodity.
In that context, Yahoo's handling of its new property will speak to the forces of the Internet as an ecosystem. It will answer the question of whether a big-and-hungry Internet company is indeed capable, psychically and infrastructurally, of "not screwing it up." It will tell us whether coolness, on the Internet, can actually be transferrable -- and it will hint at the extent to which communities will allow themselves to be bought and sold at will. Yahoo's latest acquisition is, in other words, and in pretty much every way possible, a big deal.