Marissa Mayer's Secret Plan For Tumblr Has A Fatal Flaw

Last week, we reported Yahoo CEO Marissa Mayer's secret plan for Tumblr, the blogging-platform Yahoo acquired for $1.1 billion back in 2013.

According to several sources, Yahoo executives are working to turn Tumblr into the company's answer to YouTube.

The idea is for Tumblr to become the exclusive distributor of videos from YouTube stars like JC Caylen, JennXPenn, Teala Dunn, Ricky Dillon, Connor Franta, JackJack, and Bethany Mota.

In the week since, a source in the online video industry approached us to say that Yahoo's plan isn't going to work.

"No one is going to take it seriously."

The reason: This source says Yahoo has decided not to offer YouTube stars large cash advances as an incentive to move.

This source says that the original plan Yahoo executives floated with people in the industry was that it would pay YouTube stars a large amount of money up front if they agreed to post their videos to Tumblr weeks or months before posting them to YouTube. Yahoo executives also suggested that Yahoo would be able to offer YouTube stars a better ad revenue split than YouTube was willing to do.

Re/code's Peter Kafka and Kara Swisher wrote a report on these talks back in March (though they did not mention Tumblr).

Somewhere along the line, the plan changed, says our source.

The better ad revenue split remains, but the guarantees are gone.

Where's that leave Yahoo's plan to turn Tumblr into a YouTube rival?

"Not going to happen," says our source.