Yahoo! Confirms $1.1bn Purchase Of Blogging Site Tumblr

Facebook Twitter Google + LinkedIn

Internet giant Yahoo! has officially confirmed its move to purchase blogging site Tumblr in a deal worth $1.1bn.

Speaking on her own Tumblr blog, the search engine company's CEO, Marissa Mayer, announced the deal, adding she would allow Tumblr to operate independently and her firm would not "screw up."

Ms Mayer said: "Tumblr is incredibly special and has a great thing going.

"We will operate Tumblr independently. David Karp will remain CEO. The product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve."

The acquisition marks Ms Mayer's biggest venture to date, with the Internet giant looking to explore alternative ways of generating its revenue beside search engine marketing firms using the platform for SEO and PPC purposes, especially with Google now bossing the market.

This latest move would allow Yahoo! to revitalise itself as a brand more appealing to younger generations and move more into the realm of social media and online content.

Despite being at the firm for less than a year, Miss Mayer's 300 days at the helm is only surpassed by Carol Barthz who was CEO from January 2009 until September 2011 and co-founder Jerry Yang who had the position from June 2007 to January 2009.

Others have found the Yahoo! throne too hot to handle with Ross Levinsohn, Scott Thompson and Tim Morse all lasting less than a year in the role.

Getting the flailing ship back on course  has proved to be harder than first envisioned for some, but Ms Mayer has brought a return on finances not seen for a number of years and Tumblr could be just the acquisition her firm needs to bring Yahoo! back to the forefront.

Founded by American web developer David Karp in 2007, Tumblr attracted almost 75,000 members in its first few weeks. The site now boasts over 109 million blogs and employs some 175 staff members.

Discussing the deal on the company's staff blog, Karp said: "Yahoo is the original Internet company, and Marissa and her team share our dream to make the Internet the ultimate creative canvas. I couldn't be more excited to have her help.

"We also share a vision for Tumblr's business that doesn't compromise the community and product we love. Plus both our logos end with punctuation!"

Although Yahoo! has made a number of smaller acquisitions, the size of this deal will certainly raise some eyebrows, especially considering the $1.1bn sum; Tumblr was previously valued at $800m.

Questions may also be asked over the money it can make from ads, with Tumblr only making a reported $13m in revenue last year, but Yahoo! has been quick to address such concerns with chief financial officer, Ken Goldman, concurring revenue would be modest this year, but would be ramped up by 2014.

He said: "We do think those revenues will start monetizing materially [and] will contribute to revenues in 2014 and beyond.

"Not just standalone for Tumblr but also incrementally, helping Yahoo to growth."

News brought to you by ClickThrough – specialists in Search Engine Optimisation and Internet Marketing.

Subscribe to our blog and get the latest industry-updates direct to your inbox