We're starting to see another destructive trend in acquisitions. First we saw a trend in acquihires. This clearly is bad for users and only serves founders interests. Now we're starting to see a trend towards acquiring relevance. For example, Facebook bought Instagram for "$1 billion" before it made any money for the sake of remaining relevant. In Facebook's defense, they bought it on a cash/stock (reportedly 30% cash/ 70% stock) deal. The stock ended up being worth much less. Yahoo buying Tumblr may work out, but it's very unlikely it will have any direct financial return on investment. The only return on investment is the slight chance Tumblr stays a relevant brand and in return keeps Yahoo's brand afloat. Yahoo needs to make some big bets, but I'm not convinced this is the right one.

What do you think would be their best bet? My guess is it would be something less trendy since most of those end up being fads. Google's best acquisition was clearly Applied Semantics; not YouTube.