Report: Yahoo buying blogging platform Tumblr for $1.1 billion

tumblr111Yahoo is reportedly buying Tumblr for $1.1 billion in cash, a deal that was first reported by All Things D.

The Wall Street Journal, citing people familiar with the matter, reports that the Yahoo board has approved the deal.

It would mark the biggest deal yet for Yahoo CEO Marissa Mayer, and it would give the company a big shot-in-the-arm when it comes to reaching the coveted 18 to 34-year-old demographic.

Based in New York, Tumblr boasts 108 million blogs and 175 employees. As part of the deal, All Things D reports that Tumblr CEO David Karp is incentivized to stay at Yahoo for four years. The service, which generated just $13 million in revenue last year, is expected to remain relatively independent.

Yahoo is expected to announce the deal, as well as an update on its Flickr photo sharing service, on Monday, reports The Wall Street Journal.

Yahoo is looking to supercharge efforts under the direction of Mayer. Revenues fell seven percent to $1.1 billion in the first quarter. It finished the quarter with cash, cash equivalents and investments of $5.4 billion.

“We are moving quickly to roll out beautifully designed, more intuitive experiences for our users. I’m confident that the improvements we’re making to our products will set up the company for long-term growth,” said Mayer in the company’s first quarter earnings release last month.

  • Andrew

    whyyyyyyyyyyyyyyyyyyyyyyyy? how is it going to “supercharge efforts” if tumblr had just $13 mln in revenue? what “efforts” it’s going to “supercharge”? faster bankruptcy? i could justify buying instagram — at least its super-popular — but this?? i can’t believe we’re back to dotcom bubble 2.0….

    • Guest

      The new magic number to acquisitions is $1B. Is it totally inflated bogus hype? You bet! However, there are many people who trade shares based on media hype. People react emotionally with money. As Kenny Rogers once said “You got to know when to hold ‘em, know when to fold ‘em, Know when to walk away and know when to run.”

    • michaelwolf

      Um, Tumblr is super-popular. If that’s your criteria, you’d approve this.

  • http://www.techmansworld.com/ Michael Hazell

    This is going to make Tumblr worse. Might as well forget them as Yahoo has a notorious history of ruining everything it puts its hands on.

  • http://profiles.google.com/clive.boulton clive boulton

    Marrissa cements her reputation turning Tumbr’s potential into a value multiplier or concretely her reputation is set in destroying value. TBD.

  • http://www.daniellemorrill.com Danielle Morrill

    This is lazy journalism, the WSJ article also says that Tumblr has not confirmed the deal so I am not surprised you changed your headline. http://www.daniellemorrill.com/2013/05/in-race-to-be-first-on-tumblr-acquisition-by-yahoo-wall-street-journal-publishes-questionable-headline/

    • bizdevguy

      Unfortunately, the vast majority of the time, the phrase “lazy journalism” is redundant.

      Having taken a look at your blog, you and Geekwire are happy exceptions.

  • Guest

    Congrats to Tumblr on a successful exit! This infusion of cash is exactly what Tumblr needs to keep its vibrant community of animated GIF makers and rebloggers doing whatever it is that they do to create value.

  • Squarely

    What does Yahoo do ?
    Never buy something that has a wrong spelling…

  • http://4ftphotoz.postach.io/post/a-childhood-memory 4ftPhotoz

    yeah……. this is not gonna go over well lol