Yahoo has concluded a $1.1bn (£725m) deal to acquire Tumblr, the microblogging and social networking website, which achieved revenues of just $13m (£8.56m) in its last financial year.
The deal is the largest undertaken by Yahoo CEO Marissa Mayer since she took the helm of the company in July 2012. The aim is to acquire a wider social media presence, especially among younger audiences, as well as to "cross-sell" other services, such as Ymail and the Yahoo portal. In the process, Yahoo will be able to sell advertising across a wider range of sites and audiences.
Further reading
Yahoo's Mayer receives $36m in first six months as CEO Yahoo emails breached again while Guardian victim of Syrian hackers Yahoo buys news summarisation app from UK teen for 18m
Tumblr was founded by student David Karp in 2006 when he was 20. It enables users to post mixed-media blogs. According to its homepage, it now hosts some 108 million blogs, with a total of £50.7 billion posts.
Mayer said that Yahoo would integrate the Yahoo homepage, email and search facilities with Tumblr. Users, though, claimed that this missed the point of Tumblr, with its clutter-free interface comparing favourably to sites such as Facebook and MySpace.
Furthermore, while the internet market is expected to grow most strongly in mobile, Tumblr remains a predominantly desktop PC experience.
There is also a wide disparity between the amount that Yahoo is paying for Tumblr and its revenues - $1.1bn to $13m. It has also consumed some $125m (£82.3m) in venture capital funding to date.
And users and commentators online are almost universally dismissive of Yahoo's ability to successfully integrate and grow acquired companies.
"Everything Yahoo has touched - everything that depended on user content generation, sharing, connection and discussion - has been ruined," wrote one writing on The Guardian website.
Critics of the deal also bring up Tumblr's widespread use to host pornography, which Yahoo is likely to expunge, and question how much of the site - and its traffic - will be left after it has been cleaned up.
They point to Flickr, the image hosting website that Yahoo acquired in 2005, which alienated users with the imposition of "Byzantine policies", particularly regarding offensive content, shortly after it took it over.
Similarly, Yahoo acquired Del.ici.ous, a social bookmarking web service for storing, sharing, and discovering web bookmarks, in December 2005 for a sum believed to be between $15m (£9.9m) and $30m (£19.8m).
It was soon eclipsed by a number of other similar services, such as Stumbleupon, and sold on to AVOS Systems in 2011 - but not before, in the opinion of former users, alienating the people that had made it what it is.
Possibly the biggest crater left behind by Yahoo's M&A practices is Geocities, the early social networking website founded in 1994. By 1999, when Yahoo took it over for $3.57bn (£2.4bn) in stock, Geocities was the third most visited site on the internet - after AOL and Yahoo.
But users were alienated early on by the introduction of a draconian new set of terms and conditions, and left en masse - fuelling the growth of alternatives, such as MySpace - and, 10 years later, Yahoo closed down all except the Japanese subsidiary.
