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Yahoo Takes Another Hit As Tumblr Underperforms

| by Sheena Vasani

Yahoo's high hopes for its Tumblr purchase in 2013 have so far failed to live up to its expectations.

The blogging platform failed to meet Yahoo’s revenue goals for 2015.

“In 2015, we experienced a slower ramp in monetization than we initially expected, and coupled with the sales realignment, the business didn’t deliver that $100 million revenue goal for the year,” Yahoo's CEO Marissa Mayer said, the Wall Street Journal reported.

Mayer had previously said in 2014 that “Tumblr’s revenue is growing nicely and we anticipate them achieving more than $100 million in revenue, as well as positive EBITDA in 2015.” 

Moreover, Tumblr — once valued at $990 million — has lowered its valuation to $760 million, according to Engadget.

In 2013, Yahoo attracted international attention after it bought Tumblr for $1.1 billion, or at about $3 each for its monthly active users at the time, according to Wall Street Journal. It was Mayer’s biggest acquisition and was expected to revitalize the otherwise struggling company.

Now some wonder, given 2015's disappointing results, if they paid too much.

While buying Tumblr did increase Yahoo's user base to a billion after the purchase, Mayer had expected Tumblr to do so immediately — not over one year later in October 2014.

Even then, some question these numbers. This is because Yahoo reportedly employed new measurement tools to decipher its audience figures across devices. Moreover, the number hasn’t been updated since then — the figures have remained unchanged from February 2013 to October 2015.

These figures are just some of the many obstacles Mayer is facing.

“More than three years after Marissa Mayer took the reins at Yahoo, morale is sinking and top executives are departing,” Douglas MacMillan explains as he writes for The Wall Street Journal. "Part of the problem is that Ms. Mayer has set so many different goals for the company and failed to deliver on many of them, say current and former employees."

Sources: EngadgetThe Wall Street Journal (2) / Photo credit: Engadget 

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