Yahoo Buys Tumblr For $1.1 Billion


Anis Vijay Modi
Staff Writer

Internet giant Yahoo buys Tumblr for a reported $1.1 billion, according to CNN Money. The deal is expected to help Yahoo reach Tumblr’s younger, more active crowd base. “We promise not to screw it up,” said Yahoo CEO Marissa Miller in a post on her own Tumblr account.

While Tumblr’s numbers are not comparable to bigger social network giants such as Facebook and Twitter, the latest acquisition is set to introduce more users to the already popular blogging hub. According to the company, Tumblr hosts 105 million blogs, while logging in 300 monthly visitors and 120,000 new sign ups every day. For many of Tumblr’s loyal users, the corporation buyout might seem a little intimidating. Marissa Miller, Yahoo’s newly-appointed CEO, took notice of these concerns and answered through her personal Tumblr account. “Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently, and David Karp will remain CEO,” she promised. “Yahoo! will help Tumblr get even bigger, faster”.

Industry analysts hail this acquisition as a smart move on Yahoo’s part. According to Business Insider, the company is expected to take three general steps in order to increase profits from its newest asset. First, Yahoo, which brings a big chunk of its revenue from advertising deals, could fill the empty spaces on Tumblr’s layout, which until now was mostly ad-free. The addition of Tumblr will also allow Yahoo to venture into new advertising territory—native advertising, which has been most effective on social networking sites. This kind of advertising promotes the integration of ads into the site’s usual content. An example of this advertising strategy is Facebook’s suggested pages, or the random promoted tweets that become part of your Twitter feed. Ultimately, BI reports, the blogs that people follow on Tumblr provide a good indication of what their interests are, thus allowing Yahoo to fine tune their advertising machine and show better targeted ads across its platforms.

This acquisition falls in line with other high profile moves Mayer has introduced to Yahoo in an effort to revitalize the company. These changes included giving out free iPhones and tablets to company employees and extending maternity leaves as part of company policy. On the other hand, Mayer had also attracted industry-wide scrutiny after limiting her employees’ ability to work from home. Despite acquiring Flickr, and changing its aging home page and redesigning the company’s renowned email service, Yahoo has reported disappointing first quarter results and a grim outlook, at least for the near future.

CEO David Karp, which established the website in early 2007, is expected to stay at the helm.

Image Courtesy of Tumblr