Yahoo agrees to pay in excess of $1bn for Tumblr

Tumblr: set to be acquired by Yahoo
Tumblr: set to be acquired by Yahoo


The deal was first rumoured last week and is set to be officially announced later today.

It is thought that the Yahoo board has approved a deal worth $1.1bn to buy Tumblr after talks with founder David Karp and investors.

According to the sources quoted by AllThingsD, "the board said the deal was a foregone conclusion and was a unanimous vote by the Silicon Valley Internet giant".

It is chief executive Marissa Mayer's big gamble to turn Yahoo around and inject some cool in to the struggling internet business.

The deal will also give it a foothold in the social media world and access to the much sought-after 18- to 24-year-old audience who make up many of Tumblr's users.

Tumblr is much more than a blogging platform, like WordPress or Google's Blogger for instance, it is a social platform built with social media at its core, which is what makes it so attractive to Yahoo.

"According to numerous sources, Mayer determined quickly that the fast-growing content site, turbocharged by mountains of user-generated content, was just the kind of property that Yahoo needed to make it both "cool" and relevant to new audiences," according to AllThingsD.

Its growth as we know is attracting more advertiser attention. However, it has yet to create a solid revenue model. In November, we reported that Tumblr had set its sights on major UK advertisers.

Tumblr founder and chief executive David Karp expanded on this point in a Forbes interview in January, where he said he wanted to reinvent internet advertising.

He dismissed what Google and Facebook do as "hyper-hyper targeting of little blue links". Karp wants advertising to be more creative, more beautiful, and he hopes, more engaging.

The Tumblr deal rivals that of Facebook's $1bn bid to buy Instagram last year. There is almost certain to some kind of backlash against Tumblr as there was with Instagram, but that has not held up the latter's growth, which has gone from strength to strength.

Tumblr is one of the most high-profile and closely watched of all the second wave of social media firms that came after Facebook and Twitter.

Another possible target might have been Pinterest, but Tumblr is seen as being considerably cooler and was much talked about during the 2012 US election.

The Obama campaign particularly took to it and scored big hits with animated GIFs. Not so much for Mitt Romney’s team, but both paid a good deal of attention to it overall and helped to boost its profile further.

During the US election, we also saw how one Tumblr post became the most popular of all time with a whopping eight million shares.

In March, Tumblr passed the 100 million blogs milestone. On the way to achieving that, Tumblr has racked up more than 44.6 billion posts and has attracted an audience of roughly 170 million people per month. All that has helped it become one of the top 10 most-visited sites in the world.


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