Yahoo's Big Mistake

Buying Tumblr was a good move but selling Alibaba is going to haunt Yahoo for a long time.

One of the sensible reasons Yahoo! Inc.'s Chief Executive Officer Marissa Mayer gave for her $1.1 billion acquisition of Tumblr Inc. was the opportunity to target the elusive 18 to 34-year-old demographic with the company's endless web of online advertising. The financials of the deal are a little more difficult to grasp: Yahoo's revenue has stagnated over the last few years and Tumblr is still so new that it barely has any revenue at all, much less any profit.

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