Yahoo’s Board Approves $1.1Billion Acquisition Of Tumblr

Yahoo Inc’s board of directors has approved the acquisition of social media blogging site Tumblr for $1.1 billion in cash, according to sources. Rumors that Yahoo might be in discussions to buy Tumblr emerged last week, and on Friday, Yahoo announced a mystery press event to be held in New York City on Monday afternoon. Tumblr’s headquarters are in Manhattan.

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This acquisition would be Yahoo CEO Merissa Mayer’s biggest ever since she has joined the company in July 2012. Yahoo is keen on fast-growing Tumblr because its younger user base would thrust the older website’s “cool factor,” as quoted by the company itself. Previously, Yahoo has also purchased a to-do app Strid, a news aggregator Summly and others within just a period of one year.

In acquiring Tumblr, it’s said that Yahoo will keep the social networking site largely the same as it is today as far as how independently it operates. It’s suggested, on the other hand, that advertisements may be incorporated on a much larger level than they are today, generating revenue for Tumblr and Yahoo.

Mayer, who spent 13 years at Google Inc , is trying to revitalize a former Internet powerhouse that in recent years has struggled with declining business. On its home page, Tumblr says it hosts 108 million blogs, with 50.7 billion posts between them. Tumblr, one of the more successful Internet start-ups out of New York, has only just begun earning revenue through advertising. They also announced this past week during Google I/O 2013, the company’s yearly developer conference, that they’d be delivering an official app for the wearable device platform Google Glass. The company has also been regularly focusing on the mobile and tablet platforms, and keeps updating its apps for various platforms.

Both Yahoo and Tumblr were unavailable for comment on the news. Tumblr has just $13 million in revenue right now. It should be able to increase that revenue following the model of Twitter and Facebook. Tumblr could also go the way Facebook and Instagram went.

I believe there are both positives and negatives regarding this development. Many have already started calling ‘Rest In Peace Tumblr’ while others sound optimistic as to how Yahoo might take advantage of Tumblr and improve its service while at the same time maintain the independence of Tumblr. I’m eagerly watching this space and let’s see how things pan out in the near future for both the companies as the purchase definitely affects both of Yahoo and Tumblr.
Image Courtesy |  businessinsider

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