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“ If Apple were a worker it would have paid the federal government $36 billion in taxes. Instead of paying taxes, Apple has taxes that are deferred for as long as it chooses. In total, I estimate from corporate disclosure documents, American multinational companies have $2 trillion of untaxed profits offshore because they did just what Apple has done. Had Congress required those companies to pay up last year it would have been the equivalent of all the income taxes paid by everyone in America from January until July 10. Imagine that, all the income taxes taken out of your pay or pension from January into the middle of summer just so Apple and other multinational companies can profit today and pay their taxes someday.”—David Cay Johnston
“The board of Yahoo, the faded Web pioneer, agreed on Sunday to buy the popular blogging service Tumblr for about $1.1 billion in cash, people with direct knowledge of the matter said, a signal of how the company plans to reposition itself as the technology industry makes a headlong rush into social media. The deal, which is expected to be announced as soon as Monday, would be the largest acquisition of a social networking company in years, surpassing Facebook’s $1 billion purchase of Instagram last year. For Yahoo and its chief executive, Marissa Mayer, buying Tumblr would be a bold move as she tries to breathe new life into the company. The deal, the seventh since Ms. Mayer defected from Google last summer to take over the company, would be her biggest yet. It is meant to give her company more appeal to young people, and to make up for years of missing out on the revolutions in social networking and mobile devices. Tumblr has over 108 million blogs, with many highly active users. Yet even with all those users, a basic question about Tumblr and other social media sites remains open: Can they make money? Founded six years ago, Tumblr has attracted a loyal following and raised millions from big-name investors. Still, it has not proved that it can be profitable, nor that it can succeed on mobile devices, which are becoming the gateway to the Internet. Even Facebook faces continued pressure from investors to show it can increase its profits and adapt to the mobile world. “The challenge has always been, how do you monetize eyeballs?” said Charlene Li, the founder of the Altimeter Group, a consulting firm. “Services like Instagram and Facebook always focus on the user experience first. Once that loyalty is there, they figure out how to carefully, ideally, make money on it.” A Yahoo spokeswoman declined to comment. A representative for Tumblr did not respond to requests for comment. If the deal is approved, Ms. Mayer will face the challenge of successfully managing the takeover, given Yahoo’s notorious reputation for paying big money for start-ups and then letting the prizes wither. Previous acquisitions by Yahoo, like the purchase of Flickr for $35 million and a $3.6 billion deal for GeoCities, an early pioneer in social networking, have been either shut down or neglected within the company. Because of this, Ms. Mayer will face pressure to keep Tumblr’s staff, led by its founder, the 26-year-old David Karp, who dropped out of high school as a 15-year-old programmer. It is unclear whether all of Tumblr’s 175 employees, based in New York City, will move over to Yahoo.”—
The New York Times, “Yahoo to Buy Tumblr for $1.1 Billion.”
David Karp will get $250 million, BTW.
Yahoo buys Tumblr
The news is official, Yahoo buys Tumblr for 1.1 billion.
There are a lot of people up in arms about it for good and bad (mostly bad) reasons. It should be made clear that startups (and companies) are in the business to make money. Startups are built for exits. Sometimes that timeline has a long horizon (IPO). Sometimes they are short (acquired, sold, fold). That’s why investors are willing to invest in them; so that one day they might bring back a large return for their risk.
As much as I love milk tea, Boba Guys isn’t “just for fun”. Our goal has always been to be the very best at what we do and to change the tea game like the Blue Bottles and Philz Coffees of the world have been able to do for coffee. Building and owning your own company is a lot of fun, but we’ve also put in a huge chunk of our life savings and countless hours into it. It takes its toll.
No entrepreneur in their right mind spends a huge chunk of their life building something for free. Money isn’t everything, but it’s certainly part of the equation. How it comes (through advertising, paid subscription, talent/tech/user acquisition) isn’t always uniform but payment is unequivocally rendered. If Tumblr gave me the option to get paid out for putting ads on my site, the left side would be Phoenix College and the right side would be penis pills before you could refresh.
What’s troubling to see is that there is a lot of entitlement towards something we didn’t create. Even worse, there’s backlash when a startup decides to monetize. We saw it happen with Instagram. It’s a free service and it’s awesome! We use the service and we can leave at any time.
One could argue that the services would be nowhere without the users (or early adopters). I would counter that I have acquired far more value from Tumblr, than they have from me. And I’ve been on the service for almost 5 years and paid nothing. When Google Reader decided to shut down, I was disappointed but optimistic that someone would pick up where it left off and make it better because again, I paid nothing and deserve nothing. If I cared enough, I might even build my own.
We live in interesting times..the tools and technology available today enables anyone with an Internet connection to build and deploy anything we want to see in the world. Don’t like a blogging platform anymore? Roll your own. Hate ads? Learn to pay when you receive value. I’ve never bothered to e-beg like Maria Popova but would you be upset if I did?
Pretty sure it’s the right thing to do to send out a formal contract to the artist before they start sending in rough work/sketches, and not after the fact. Even if they are rough sketches that need feedback, there is no excuse to not fully entrust the artist to do their part just because it is “rough” work. We’re not that naïve. Even the project for Disney required us to sign a contract before ANY work was done, including rough sketches. Something smells a little fishy…
- Peeps… always request a contract before you do any kind of work, no matter how much they try to avoid the question! If so, don’t do that project. Some people will think that you will be an easy target because you are under the age of 20 (or still very young) and that any money will be great for you. We have learned this from our first experience as freelancers when we were 16, and since then, it has never happened again. And it won’t happen this time either. Ask for a contract.
- Also, look into their company/site. Are they really working for who they say they are working for? Look into it. If they do not give one or even suggest a contract, it is definitely not worth your time and your skill.
- Don’t let a flashy name/company or some sweet talk entice you either. Be smart about it. But don’t be too disappointed if you turn it down. It is better being safe than sorry. Don’t be cheated. Save your time and effort into something that will be worth-while.
Feel free to put your input. Pfft, just go look up Stephen Silver’s posts. He talks a lot about this!
Might add more to this later…