Yahoo's Tumblr Acquisition : $1.1 Billion Is Not Enough!

Ever since Marissa Mayer took over the control at Yahoo, the company's managed to grab some attention from the media. This time, it's about Yahoo's plans to buy Tumblr - the rapidly growing blogging / content generation platform. AllThingsD blogged that they've learned from the sources closer to the situation that Yahoo's board will meet on Sunday night whether they should really consider snapping Tumblr with $1.1 Billion all-cash offer. New York based Tumblr, is said to be looking for more and has reportedly rejected the takeover.

Yahoo's considered various options from strategic investment in Tumblr to complete acquisition as Marissa Mayer thinks that Tumblr's content generation platform is going to play a key role in Yahoo's future growth. Why is Tumblr so important for Yahoo? Well, because the platform has succeeded in attracting young content creators through their innovative blogging tools. Tumblr's growth has been astonishing in the recent months. The site's already managed to find place in top 10 sites with about 150 million uniques and tens of billion of impressions each month. It currently hosts about 108 million blogs containing about 50 billion posts.

Tumblr has raised close to $125 million so far from investors including Spark Capital, Union Square Ventures, Sequoia, Greylock VP, Insight VP and Chernin Group; and is reportedly valued at about $800 million.

What's in it for Yahoo?

It's no wonder that in order to resurrect its brand, Yahoo needs a lot of young audience - the kind Tumblr has built in the last few years. Getting access to this audience is going to be a lot easier by buying Tumblr for a billion dollars than finding out other ways or building viral products. Yahoo's only bought mobile focused companies in the recent times and has already made it clear that they are tad serious about growth via mobile. Yahoo will also be able to expand their advertising portfolio and be seen as an even bigger media property on the Internet.

What's in it for Tumblr?

Tumblr's said to be running out of cash fast - as the infrastructure costs are huge. It's got several months of run available with them. But more than that, Yahoo can quickly help Tumblr build a better infrastructure and also help Tumblr make more money through their own advertising network. Plus, Karp is said to be looking for a COO to help him build infrastructure. Mayer has already spend time with Karp assuring him how Yahoo can help Tumblr turbocharge business.

yahoo-tumblr-takeover

Tumblr however is waiting for Yahoo to up the offer, saying $1.1 Billion isn't enough. What do you say? Should Tumblr wait or grab the money?

Source: Yahoo Board to Meet Sunday to Consider $1.1B, All-Cash Deal for Tumblr - Kara Swisher and Peter Kafka - Media - AllThingsD

Replies

  • Kaustubh Katdare
    Kaustubh Katdare
    Update: Wall Street Journal has tweeted that the Yahoo Board has approved the $1.1 Billion deal to acquire Tumblr. Yahoo's holding an event tomorrow to announce 'something new'. It's likely that the acquisition news won't be out tomorrow.

    It's going to be a lot more interesting to know how Tumblr's fans would react to the Yahoo's acquisition of Tumblr. Would they still continue to use Tumblr just as often as they're at present? Many would probably quit - because Yahoo's not just as cool as it used to be.

    It looks like 'a billion' is the 'new million'. Most of the deals happening these days are in the billion dollar range. David Karp surely has a tough call to take.

    I'm curious to know how many of CEans who are Tumblr users think about the Yahoo-Tumblr acquisition deal? Would you continue to use Tumblr if it goes into Yahoo's arms?
  • Kaustubh Katdare
    Kaustubh Katdare
    Finally, Yahoo's acquired Tumblr for $1.1 billion. It won't screw their business and will allow David Karp to be CEO of the business.
  • Sarathkumar Chandrasekaran
    Sarathkumar Chandrasekaran
    Ms.Marissa Mayor Ceo of Yahoo had announced that M..karp founder of Tumblr will continue to work at Yahoo for next four years(till 2017).Yahoo had paid a hefty $110Million for Mr.Karp to continue his service at Yahoo.Mr.Karp has more than 25% of share in Tumblr and Ms.Marissa Mayor had frankly said that Mr.Karp will work independently as CEO of Tumblr at Newyork while Yahoo has its base at Sunnyvale,Calif.shdkj
    We all know that yahoo purchased tumblr recently as a measure to sustain in the market.
    Is the money spent to retain Mr.Karp is too high?
  • Kaustubh Katdare
    Kaustubh Katdare
    #-Link-Snipped-# : This is in continuation with the existing discussion on Yahoo - Tumblr acquisition. I've merged the posts.

You are reading an archived discussion.

Related Posts

Google's launched 'Native Client' a new technology that will allow developers to run their native C, C++ compiled code on the web; as a part of the web apps. Native...
What is a dangling name and Dangling Pointer????
can u explain me clearly about automation in transmission substations ????
Greetings Readers, Here is the first article in my series "A Walk to Secure future" "Let us discuss about the basic concept of hacking and general notions and knowledge of...
So What I understood is that- Classname object=new Classname(); Here an object will be created in heap and the reference to it will be stored in stack.After we close the...