Yahoo acquires Tumblr in $1.1 billion deal

Yahoo acquires Tumblr in $1.1 billion deal

By Hayley Tsukayama, Updated: Monday, May 20, 9:06 AM

Yahoo announced Monday that it is buying the blogging site Tumblr with the express promise “not to screw it up.”

The company made the announcement after days of speculation that the Web giant would scoop up the fast-growing blogging site. As All Things Digital reported on Sunday, Yahoo said in a release that the deal is worth approximately $1.1 billion, “substantially all of which is payable in cash.”

Tumblr, which was started in 2007, has approximately 100 million blogs on its network and complements Yahoo chief executive Marissa Mayer’s vision of making Yahoo into a more mobile, younger, hipper company. In the company’s press release announcing the acquisition, it seemed clear that Mayer is not interested into changing Tumblr very much, saying that the company will be independently operated.

“On many levels, Tumblr and Yahoo! couldn’t be more different, but, at the same time, they couldn’t be more complementary,” Mayer said in a release. “Both companies are homes for brands - established and emerging. And, fundamentally, Tumblr and Yahoo! are both all about users, design, and finding surprise and inspiration amidst the everyday.”

Tumblr’s founder, 26-year-old Dave Karp will remain with the company, saying in a company blog post that he is “elated” that Tumblr is joining Yahoo and said that the deal changes very little about the company.

“We’re not turning purple,” Karp said, in reference to Yahoo’s signature logo color. “Our headquarters isn’t moving. Our team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn’t changing.”

Karp said that the acquisition will, however, allow Tumblr to “get better faster” and provide it with more resources.

Some Tumblr users had expressed concerns that a Yahoo acquisition would fundamentally change the Tumblr community, in a manner similar to the way some Instagram mourned the news of last year’s Facebook acquisition.

Many noted how the company had changed the photo-sharing site Flickr after a 2005 acquisition. As rumors mounted, several people threatened to close their blogs and take them elsewhere if a deal went through.

Others said they were worried that Yahoo would tighten Tumblr’s fairly lax content posting policies — the site, in fact, has a reputation for hosting adult content — while others highlighted this as a possible plus for the community.

One main objection to the deal is the likely outcome that a Yahoo acquisition means there will be more advertisement on the site. Last month, Tumblr introduced its first mobile ad products — sponsored posts that show up on users’ feeds with an animated dollar sign to let users know it’s an advertisement. With Yahoo’s data and ad experience in tow, Tumblr should be able to target ads more effectively and make more money of its community.

Related stories: Should Yahoo buy Tumblr? Yahoo’s board approves $1.1 billion purchase of Tumblr, WSJ says Sign up today to receive #thecircuit, a daily roundup of the latest tech policy news from Washington and how it is shaping business, entertainment and science.

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