Yahoo is reportedly looking to buy Tumblr as part of its series of acquisitions and buy-outs to improve the service. The deal, according to sources, could reach as high as $1 billion (€778 million), which would put it in the same league as Facebook’s Instagram acquisition last year. Since taking control of Yahoo, CEO Marissa Mayer has pursued a string of acquisitions, including Summly, Astrid, Jybe, and others. Earlier this month, Yahoo had acquired to-do app Astrid.
Yahoo is seriously considering buying the social micro-blogging site Tumblr for almost 1 billion. However, since the talks about the deal between Yahoo and Tumblr are ranked as “rumors” so far, which means neither company wished to comment on the matter.
Tumblr is focussed on generating social content, such as text, photos and links. Since Tumblr’s majority of users are the youth, I think it is highly logical for Yahoo to think about Tumblr in the youth-centric sense. Tumblr has over 107 million blogs and over 50 billion posts, mostly made by young users. That definitely opens up doors to a big new audience for Yahoo. Also, Tumblr made $13 million in 2012 and is looking to bring in about $100 million, thanks to its new advertising initiatives. It also introduced mobile advertising recently.
Yahoo’s CFO has been giving the impression since recent times that the beleaguered search engine wants to sign up more and more young users, and wanted to make themselves cool and visible.
In addition to the failed Dailymotion acquisition, the company has also been rumoured to be looking at Hulu, although Mayer has previously said that the company is shopping for smaller targets valued in the $100 million range.
“If you could pick a company that fits in with what Marrissa Mayer has demonstrated in her career – aesthetics software technology and fast-growing – you could not land on a better choice,” sources said to AllThingsD.
Another thing I can say is certain is that unlike the other acquisitions Yahoo has made over the past months, Tumblr will not close in case they sign the deal. The one thing that the sources have confirmed is that the deal will happen, but whether it might happen in the coming weekend can’t be ascertained.
As far as my opinion is concerned, I believe Yahoo is on the right path but there’s no telling when the deail might get a risky one. I would look at it like Tumblr is one of the few players in digital media who has positioned itself at a sweet spot for brand advertising and youth-friendly, which Yahoo isn’t used to at the moment. The question undoubtedly remains as to how far this deal could make Yahoo relevant to new users who are stepping onto the Internet.
Image Courtesy | allthingsd