Yahoo announced its intention to buy Tumblr for $1.1 billion on Monday, April 20th, 2013 during a press conference. It’s the latest move and the biggest acquisition Yahoo has made since Marissa Mayer became the CEO on July 2012.
David Karp founded Tumblr in 2007. It is a micro-blogging website that allows users to post text, images, videos and other forms of media sharing. The social media site rivals the likes of Twitter and Facebook and is extremely popular amongst younger users. According to Quantcast, a research firm based in San Francisco, Tumblr has over 134 million users across the world, 48% of which are under the age of 26.
The purchase of Tumblr is the biggest tech purchase since Facebook acquired In-stagram. “It’s not clear when the official vote was taken, but sources close to the board said the acquisition was a foregone conclusion and was unanimously approved by the directors of Silicon Valley Internet giant,” wrote Kara Swisher, Co-Executive Editor for All Things Digital.
Despite being one of the largest websites to date, Yahoo is missing a strong social presence in the Internet world. Acquiring Tumblr would not only increase its social presence on the web, it would also boost Yahoo’s popularity among a younger demographic. Marissa Mayer took to posting about the acquisition and makes a few bold statements: “In terms of working together, Tumblr can deploy Yahoo’s personalization technology and search infrastructure to help its users discover creators, bloggers, and content they’ll love.” She also commented on the status of David Karp’s part in the process: “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.”
Tumblr has recently introduced “native ads” on their mobile apps, a factor that allows brands to advertise their own Tumblr pages. Tumblr claims it had $13 million in revenue last year; the forecast for this year will be significantly higher after the advertising has been implemented.
Yahoo has given David Karp independent control over Tumblr for four more years, allowing it to grow without much influence from Yahoo. Karp released his own statement, promising that this deal will not “compromise the community.” Tumblr users can expect the site to stay relatively the same.