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About
The Advocate is authored by the staff, board, and contributors of the Northwest Progressive Institute, a netroots powered strategy center working to raise America's quality of life through innovative research and imaginative advocacy.
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In Brief
Recent entries from our microblog... see more
Incredible, stunning footage of today’s tornado in Moore, Oklahoma (Courtesy of Basehunters)
# (Monday, May 20, 2013)
We can’t give up. In fact, now’s the time to work harder and faster. The environmental movement is bigger and stronger than it’s ever been, and the planet just lit a fire under us
— Greenpeace’s Cassady Sharp: Despite four hundred parts per million of carbon in the atmosphere, renewables are steaming ahead
# (Monday, May 20, 2013)
The women of Congress, in fabulous watercolor infographics
Fast Company: “The sitting Congress has the most women of any in history. Artist Emily Nemens is capturing each of them in paint, and using their likenesses in graphics to show how far we still have to go to bring gender equality to Washington.”
# (Monday, May 20, 2013)
A gorgeous view down river from above the Grotto in Zion National Park. Photo: Tom Morris/U.S. Department of the Interior (via America’s Great Outdoors)
# (Monday, May 20, 2013)
Yahoo's board signs off on Tumblr acquisition
The board of Yahoo has approved CEO Marissa Mayer’s proposed acquisition of microblogging pioneer Tumblr, which has a lot of potential but not a lot of revenue.
# (Sunday, May 19, 2013)
Tumblr, do you *really* want to sell to Yahoo!? After what happened to GeoCities?
Rumors are flying this evening that Yahoo! is on the verge of acquiring Tumblr. A deal may be finalized this weekend, so long as Yahoo CEO Marissa Mayer can get approval from Yahoo’s board of directors.
Yahoo is thought to have offered $1.1 billion for Tumblr. The company apparently considers itself worth more than that and is trying to get Yahoo to pony up even more, even though it has paltry revenue compared to more established tech titans.
The report about the behind the scenes negotiations reminded me of a news item from fourteen years ago: the sale of GeoCities to Yahoo for $3.4 billion. Yahoo spent more than three times the amount of money on GeoCities in 1999 that it is proposing to spend now to acquire Tumblr. What happened to GeoCities? It was ingloriously shuttered a few years ago. So much for that acquisition.
The rationale for buying GeoCities was that it would add a lot of value to Yahoo. That’s what geniuses like Scott Appleby said at the time:
Analysts say the potential acquisition of GeoCities, or a company like it, is a must for Yahoo!.
“I really think it’s the only strategy,” says Scott Appleby, an analyst with ABN Amro, adding that the growth cycle of the Internet is still in its infancy.
”Customers and consumers are still building behavior patterns,” he says. “Now is the time to build your network, now is the time to build your brand and AOL has proven that now is the time to build your business.”
In retrospect, the Yahoo-GeoCities deal doesn’t look so rosy. Yahoo is still around - but GeoCities is not. So much for GeoCities being a must-have.
Research has repeatedly shown that most corporate mergers and acquisitions fail to create value for shareholders. The business press loves to report on deals and rumored deals, but that has no bearing on whether they make business sense. That explains why dealmaking generates more headlines than returns.
Which leads us to ask: Tumblr, do you *really* want to sell to Yahoo? This is the company that bought Delicious and was going to close it before it found a buyer to keep it running. This is the company that let Flickr go into a stall. And this is the company that bought GeoCities for a whopping $3.4 billion in 1999 and then extinguished it ten years later. Don’t think the payout you’ll be getting will be any kind of insurance against a similar fate for Tumblr down the road.
So, David Karp and team, think long and hard before you decide to sell. Look at what happened to the other companies that Yahoo bought.
And heck, ask Yahoo about it. You might want to drop the word “GeoCities” during the negotiations and see what kind of reaction that elicits.
# (Friday, May 17, 2013)
CBO says the federal deficit has shrunk - but the traditional media isn't reporting it
Media Matters: “Following months of media calls for deficit reduction, cable news channels spent just over 7 minutes reporting on a revised Congressional Budget Office (CBO) projection that the 2013 deficit will decline by more than previous estimates. Broadcast network news evening shows did not cover the new report.”
# (Friday, May 17, 2013)
Sacramento group, Maloof family reach deal for Kings
The Maloof brothers have reportedly agreed to sell their controlling interest in the Sacramento Kings franchise to a local ownership group that will keep the team right where it is. The deal leaves Chris Hansen and his group with no stake in the franchise.
# (Friday, May 17, 2013)
Paul Otellini's Intel: Can the company that built the future survive it?
The Atlantic’s Alexis Madrigal: “As the CEO steps down, he leaves the Intel machine poised to take on the swarming ecosystem of competitors who make smartphone chips.”
# (Friday, May 17, 2013)