NEW YORK (MainStreet)Until today, Jim Cramer thought Tumblr was a kind of drinking glass. So when Yahoo! announced its $1.1 billion acquisition of the micro-blogging platform founded by David Karp in 2006, we had to step in and set him straight. We introduced him to my personal Tumblr and explained how the Yahoo! deal is really ODNB incarnate--an aging behemoth trying to stay current with the kids. Yahoo! can't really expect to monetize on Tumblr, but by giving the social network with 100 million blogs a splash of purple, CEO Marissa Mayer gives her company a face-lift and a tipple of a rejuvenating elixir.
Yahoo! has been on a tear recently after March's $30 million acquisition of Nick D'Aloisio's Summly, a news summary app,in addition to other pick-ups like social recommendation company Jybe and GoPollGo.
Some of these acquisitions give Yahoo! extra programming and strategy talent, and in part, Yahoo! is playing a keep-your-enemies-closer tactic by acquiring potential competitors in the mobile space. There are even rumors that Yahoo! will aim for Hulu next.
Given that Karp didn't pull a Zuckerberg and remain independent from being bought, this acquisition may be as much an abdication as a victory. Of course, he'll be micro-blogging all the way to the bank.