Yahoo buys Tumblr for $1.1 billion cash, reports sayBy Angel Cuala on May 20, 2013 in Business, Internet, Technology •
Yahoo buys Tumblr for a whooping $1.1 billion in cold cash, according to reports from Wall Street Journal and technology news site AllThingsD this Sunday, May 19, 2013. Tumblr, a popular microblogging platform and social networking website, was launched in February 2007.
Yahoo and Tumblr logo
According to earlier reports, Yahoo plans to buy Tumblr, which hosts 108.5 million blogs and 50.9 billion posts as of this Sunday. But it now appears that the rumors were true. Boards of both Yahoo and Tumblr reportedly agreed unanimously on the acquisition, people familiar with the matter told AllThingsD.
Tumblr Founder and CEO David Karp and Yahoo CEO Marissa Mayer have not yet released any official statement with regards to the deal. But AllThingsD‘’s sources noted that Karp, 27, will still stay at Yahoo for at least four more years at least and will still have the majority of control over the service.
On the other hand, Mayer allegedly decided that buying Tumblr was going to be “the stake in the ground of what her strategy is going forward for Yahoo” and that she quickly realized in her research that the site is something that Yahoo needed to make it both relevant and “cool” to new consumers – younger audiences.
As a business model, Tumblr already made $13 million in revenue as of 2012 and aims to make $100 million in 2013. So far, Tumblr has raised $125 million in funding, and among its investors include Spark Capital, Union Square Ventures, Sequoia Capital, Greylock Partners, and Insight Venture Partners.
Tumblr had 117 million visitors last April alone, according to comScore. A formal announcement from both companies announcing this business deal is being expected this Monday afternoon, which will be via a news conference from Yahoo in New York City, where Tumblr is based.
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