Blogshare: Why Tumblr Will Make Yahoo Billions

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ADOTAS (via WordStream) — Here’s why I think Yahoo is smart to buy Tumblr for $1.1B:

  1. Display ads are way under-valued. We published research last year (research that google asked me to remove) showing display ads out-perform search ads in certain industries like travel and automotive, and are close behind in most other industries. It’s because the display ad targeting is getting so much smarter and because search ads aren’t exactly cheap.
  2. Mobile ads are way under-valued. We’re seeing from our clients that calls generated from mobile are 4x more likely to convert to sale/order than a desktop user filling out a “contact us” form. Now there are “click to call” display ads being served up to mobile users. Our view is that mobile ad clicks (and calls) will cost more than desktop clicks in the next 6-12 months.

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