/// Why Tumblr Was a Massive Steal for Yahoo
The blockbuster acquisition of Tumblr by Yahoo for $1.1 billion — all cash — has been portrayed as a gigantic gamble on the part of the acquirer. However, for those of us who believe there can be specific guidelines around the valuation of interest graphs, it looks more like it might turn into a game-changing steal. Let’s look at some of the factors which might lead a big company to value Tumblr more highly than Instagram. The more specific the interest, the more valuable. After reading my recent thoughts about why Tumblr is so valuable , Josh Elman of Greylock Partners made a most astute observation: Everyone’s Facebook feed is pretty much the same as everyone else’s of the same age. Twenty-year-olds pose in the club, 30-year-olds share wedding photos, by age 40 you’re looking at a lot of cute pictures of your friends’ kids. But with Tumblr, you never know what you’re going to get — even with people you know personally. That, in a nutshell, is the difference between a social graph and an interest graph. I have noted previously that Twitter is potentially the most valuable interest graph of all , because any given user can pick and choose from the entire universe of interest-based feeds. However, Tumblr has reminded me yet again of one of the Web’s fundamental truths: a single resource is far more specific than a feed.
Why Tumblr Was a Massive Steal for Yahoo