Yahoo to close $1.1 Billion Deal with Tumblr


A $1.1 Billion deal of Yahoo to acquire the popular blogging site, Tumblr, is in the offing. Yahoo’s CEO Marissa Mayer is serious in reviving the company as it experienced a recent slump for almost two years now. As seen on her personal note at Tumblr, this former Google executive said, “ I’m delighted to announce that we’ve reached an agreement to acquire Tumblr. We promise not to screw it up… Yahoo will help Tumblr get even better.” The new CEO who just assumed post last July 2012 is ready to take the , “path to future relevance”. Yahoo experienced a lull in its revenue as advertisers favors the social networks Facebook and Twitter and the website Google. In order to retain back Yahoo to the lead, her strategies includes making the company’s presence felt on mobile devices, freshen up their sites, increase revenue and acquisition.

Tumblr is one of the most popular blogging site, a platform for creativity, for ages ranging from 18 to 34 years old founded by 26 year old, high school dropout, CEO David Karp. This is a much needed infusion to the Internet Giant will pump fresh blood to its almost ailing brand. Tumbler has been around in the cyberspace for only 6 years but it already draws about 100 Million users. The demographics mentioned is most likely what the advertisers wanted and most likely advertising revenue will come pouring in once the deal is closed.

Tumblr can share links, photos and blogpost. If Facebook can follow friends, Tumblr can follow other people’s updates. These almost frenzy acquisition could be the trend in the market right now. To note that Facebook bought Instagram for $1 Billion in cash and stocks while Google acquired You Tube for $1.65 Billion in stocks.

Recently Facebook posted a net income of $219 Million while Twitter has $288 Million as advertising revenue. These figures show that Yahoo is tailing behind these social networks as it lacks social networking and a community hub. This is CEO Mayer’s thrust to make YAHOO the leader in the bandwagon again. Upon her assumption as CEO, stockprice of Yahoo rose to an astounding 69%.

With this acquisition, CEO of Tumblr, David Karp, said, “We’re not turning purpl. Our headquarters isn’t moving, out team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to make their best work and get in front of the audience they deserve – certainly isn’t changing.”

There may be some criticisms on Yahoo’s acquiring Tumblr as based on the previous $3 Billion acquisition of Geocities. It just went down to drain and eventually got neglected. Likewise, Yahoo has to face the reputation issue of Tumblr for it’s pornographic and adult blogs which may affect advertising revenues.

But as what CEO Meyer foresees, “… the combination of Tumblr and Yahoo could grow Yahoo’s audience by 50% to more than a billion monthly visitors… and could grow a traffic by approximately 20%.”

Anthony P. Derayunan
Sources / Supporting Links / Works Cited (If none, please type “none”): www.latimes.com, yahoo news

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