‘‘It Was the Biggest Game of Chicken I’ve Ever Seen.’’

[ed. From the series: Launch. Hack. Meow.]

In mid-May, a few days before Yahoo announced it would be acquiring Tumblr, there was a housewarming party in Greenpoint. A Tumblr employee was moving into an apartment with a friend who happened to be dating another ­Tumblr employee, and the overlapping social circles resulted in a room full of Tumblr people. It was Saturday night. Late the previous afternoon, a cluster of posts had appeared on tech blogs with the announcement that Yahoo’s board would be meeting on Sunday to approve a $1.1 billion offer for Tumblr, and though everyone at the party had read the posts—or fielded texts from someone who had—nobody had really paid attention. Rumors skittered around the office on a weekly basis. Employees always joked that it didn’t matter what kind of options you had because Tumblr was never going to sell.

Plus: Yahoo? Really? When a similar idea circulated back in 2009, Tumblr’s then–lead developer, Marco Arment, summed up the party line in a scornful blog post: “I hope they let me work on some of the many exciting projects at Yahoo … I want to move to California and get stuck in traffic every day on the way to my midlevel engineering job where I sit in a cubicle all day and can’t make any product decisions while working on something nobody will ever see to manage regional ad clickthrough stats tracking.” Thanks, but no thanks. Yahoo was a lumbering Sunnyvale company with irrelevant products that no one used. Tumblr was a nimble startup in the nation’s greatest city with a boy-genius founder. An acquisition wasn’t just unlikely, it was insulting. The only company to whom they might have sold, an early employee said, was Apple (if Apple had asked).

Yahoo’s reputation as a wet blanket may have been allayed by the arrival of Marissa Mayer as CEO, but an acquisition still struck employees at the party as too icky to be true. (One guest summed it up: “No one who works in tech wants to work at Yahoo.”) As more wine and whiskey were consumed, however, the incredulity turned into fidgety speculation. One employee pointed out that Mayer had been dropping into the Tumblr office as far back as December; he remembered peering into the fishbowl conference room to see her meeting with their CEO, David Karp, and head of product, Derek Gottfrid. Nothing secret about it. Other employees were aware that after a hiring spree and floor-to-ceiling office remodel, the amount of cash left in ­Tumblr’s coffers was dwindling. At some point, partygoers who worked on the engineering side began forecasting how shitty the company would become if Yahoo were to buy it, and by the end of the night, guests were running numbers, trying to figure out how much their options might be worth. On Monday, Karp called an all-team meeting to announce the deal.

If low- and mid- and even some high-level employees were shocked—“I don’t think anyone saw it coming necessarily,” says Gottfrid—anyone paying attention to Tumblr’s burn rate should have been expecting an exit. Despite its popularity (it is the fourteenth-most-visited site in the U.S., according to Quantcast, a few slots above Wikipedia), Tumblr was a six-year-old blogging platform with disappointing revenue targets, no clear path to profitability, and alarmingly little cash in the bank (just $16.6 million when it was purchased). To stay afloat without selling, it would have needed a sixth round of funding, which, given the situation, might have led to a “down round,” and to Karp ceding a substantial chunk of his equity. As one person watching the deal unfold put it: “It was the biggest game of chicken I’ve ever seen in a startup. Literally months away from bankruptcy, and he manages to find an angel in Marissa Mayer.”’ (...)

Tumblr’s appeal can be summed up in one word, which is “easy.” If you traveled back in time to 1996 and took a grandmother whose understanding of the web was AOL and wormholed her to 2013, she’d be able to create a Tumblr blog in less than three minutes with no direction. The site’s posting icons are big, the fonts are big, everything is big: The whole thesis is that there’s no fine print and no learning curve. Generating new blogs is so easy that Tumblr limits the number that users are allowed to create in a single day. (The limit is ten.)

If the “easy” mandate feels unimaginative today, it was less so in 2007. Karp has talked a lot about his frustration with tools like Wordpress and Blogger, and he is shrewder these days in his framing of Tumblr as “a novel alternative” rather than a middle finger. Blogging in 2007 required too much work: “I had all sorts of things I wanted to share, but they were screenshots, jokes, poorly formed ideas, videos that I had just watched that were hilarious, and things that I was working on.” Karp’s idea was to create a little portal to Internet heaven, with George Takei videos, Homer Simpson quotes, pictures of Italian luxury cars, dream logs, self-portraits, observations, Lost trailers, and porn (which makes up around 11 percent of the site’s content). The new blogging would be less about writing and more about declaring a personal sensibility. Thanks to an innovation called the reblog, users wouldn’t even need to create anything themselves; they could just post what they scavenged elsewhere and, Karp says, “use that curation to tell their stories.” He sees Tumblr as a tool for “the most talented people in the world.”

by Molly Young, NY Magazine |  Read more:

Image: Platon. Grooming by Marco Braca at Kramer + Kramer.