Today, Yahoo! reached an agreement to purchase social networking giant, Tumblr, to the tune of 1.1 billion dollars — IN CASH. The acquisition is reminiscent of Facebook’s purchase of Instagram, and has left a lot of people scratching their heads, wondering what changes are in store for the microblogging behemoth.
Created in 2006 by New Yorker, David Karp, Tumblr currently serves as the home for over 108 million blogs, and has amassed more than 50 billion posts. With such a large and engaged user base, it’s easy to understand why Yahoo! (a company that’s been trying to regain it’s cool factor), would be interested in the purchase.
Karp shared his thoughts on the acquisition earlier today via the Tumblr Staff Blog
Some critics are arguing that Yahoo! may be overpaying for the acquisition, while employees at Tumblr have expressed that the price tag is too low. Tumblr was previously valued at $800 million, and generated an estimated $13 million in revenue last year. If the team at Yahoo! expects to profit from the deal, they’ll need to make some drastic changes to Tumblr’s revenue model. That may be in the form of more promoted posts, premium features, or even allowing other businesses to have access to Tumblr’s user data. Whatever the case, we can say the move has already paid off for Yahoo!’s CEO Marissa Mayer from a PR stand point. Seriously, when’s the last time Yahoo! came up in a conversation?
Stay tuned for more details on the acquisition, and check out the Forbes profile on Tumblr’s CEO David Karp above.
Mass Appeal supports Devin P-B, but not his tweets @its_DPB