Yahoo pulls trigger on $1 billion-plus Tumblr buy

Yahoo pulls trigger on $1 billion-plus Tumblr buy

Summary: The Wall Street Journal reported that Yahoo is indeed buying Tumblr for $1.1 billion. This is easily Yahoo CEO Marissa Mayer's biggest move to date.

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The rumors appear to have been correct. The Wall Street Journal (WSJ) is reporting that on Sunday Yahoo's board will approve buying Tumblr, the blogging and social networking platform, for $1.1 billion.

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Yahoo CEO Marissa Mayer makes the biggest move to date in her tenure as Yahoo acquires Tumblr for over a billion dollars.

According to the WSJ, the deal could be announced as early as Monday. Tumblr will be allowed to run as an independent business unit.

Why would Yahoo, under the leadership of newly minted CEO Marissa Mayer make such a move? The WSJ speculates that it was to gain a social networking presence. Google+ is now the second most popular social network in the world. Yahoo has had no social networking sites to speak of.

Yahoo's one previous major social networking play--the purchase of GeoCities in 1999 for approximately $3.5-billion--ended in failure in 2009

This acquisition had been rumored for several weeks. Reports suggested Mayer would announce the deal on Monday at an event in New York City, and that both companies' boards are in the final stages of approving the deal. It has also been said that Mayer will be announcing major changes with Yahoo's photo-sharing site Flickr.  

This buyout would easily be Mayer's biggest move to date. She has been unsuccessful in freeing Yahoo of its search deal with Microsoft and in acquiring online video website Dailymotion.

While Tumblr itself generated only a minute $13 million in revenue in 2012, Tumblr has hundreds of millions of users. Better still, from Yahoo's position, its users are younger than Yahoo's existing aging, and shrinking, customer base. The move is a gamble but to make Yahoo relevant again, Mayer has decided to roll the dice on a splashy acquisition move.

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Topics: Tech Industry, Networking, Social Enterprise

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40 comments
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  • Google+ is far from the 2nd most popular social network site.

    All you have to do is look at the "likes" Google gets on various news and interest stories when compared to alternate social sites to see it is almost a ghost town still.

    I still don't get the Yahoo/Tumblr link though. In all, many things have improved greatly under Mayer and you don't have to look any further than the wonderful Yahoo Weather app (yes, just a small weather app) to see there is a return to understanding design in software specifically mobile.

    But Tumblr? OK.
    Bruizer
    • Not even close

      What is your irrational obsession with hating Google? Google Plus is anything but a ghost town! There are more people in my circles the works over than there ever was in Facebook.

      Not only that, Google Plus isn't isolated and I have friends all over the world on that network and a solid 80% are active almost daily.
      slickjim
      • Sorry, buy Google+ is struggling

        I believe it's a great alternative to Facebook and in a lot of ways better than Facebook. However, few use it regularly in comparison to Facebook. Facebook simply has too large of a mind share and users simply aren't interested in keeping up with two similar services.
        SmoothDouglas
        • Google Plus claims 190 Million users, but - - - -

          As usual the way Google counts is highly suspect.

          To create a new e-mail account you are required to setup a Google Plus profile.
          Any previous gmail user that created a test profile also fits into this category.

          If you check your e-mail, you are considered a Google Plus user. You don't need to see any Google Plus content and you are considered an active Google Plus user by just checking your e-mail.

          Once you clear out the disinformation being spewed by Google about their user base, it becomes clear that Google Plus is really struggling. Real active members is probably a quarter of the claimed 190 Million, or about 45 million people. Facebook claims 850 million, or 18 times as many people.

          Yes, Google blew this one.
          Cynical99
          • Not true

            You can create a Gmail account without creating a G+ account, although I'm not sure why I am correcting this as it will not affect the continued misinformation campaign.
            george.dickson@...
          • Funny, you create a blank profile by default when you create an account

            and that's all it takes to be counted.

            If you disagree, find some evidence. You continually spew how wonderful Google is, so go find the information and bring it to the masses.

            Then again, if you can't find the information, maybe you'll understand that Google Plus really is struggling.
            Cynical99
          • I have a Google + account but not on purpose.

            Google made me sign up for it to keep my email account when I got a new phone. I NEVER use it.
            rp518
  • It was a good run while it lasted

    All good things must come to an end, and usually it's microsoft who ruins them, or Apple suing me for using the alphabet, which according to them, Steve Jobs invented. Yahoo will throw ads all over tumblr and kill it slowly.
    _____________________
    @bruizer above:
    G+ popularity is measured by its active users, not whether their members like the stories you like. That's a facebook thing they want no part of.
    zaine_ridling
  • im expecting

    A huge FROM YAHOO! Next to tumblr's logo. Just like they did with flikr... I wish MS or FB made a counter offer.
    Throw All The Things
    • MS would have

      The budget to support it
      Emmanuel Fransson
  • Mayer is showing she is from Google

    - Overpaying for a product with little (to no) long term survivability
    - Buying a product with a history of copyright violation

    Both are bad habits of Google. With this ridiculous offer for Tumbler, Mayer is showing she is a product of Google.
    wackoae
    • Ah, you mean like when .......

      Ballmer tried to buy Yahoo for $44.6B?

      "Overpaying for a product with little (to no) long term survivability"?

      I get it. Biased? Nooooo.
      D.T.Long
      • What the hell does MS has do do with my post

        Are you such an unintelligent fanboy that you have to attempt to switch everything against MS? Do you see anything about MS in my post??

        So what if Balmer made a ridiculous offer for Yahoo (yes, it was ridiculous) .... did they actually payed the ridiculous amount??
        wackoae
        • What does ......

          Yahoo's purchase of Tumblr have to do with Google?

          Are you such an unintelligent fanboy that you have to attempt to switch everything against Google? Do you see anything about Google in the blog??
          D.T.Long
          • Because it follows Google's record of purchases

            ... and guess what company she worked for before she was hired by Yahoo.
            wackoae
        • As long as we're talking about that anyway...

          ...I'm starting to wonder if it was all a clever ploy to weaken Yahoo enough that it would be forced to go in with MS on Bing. Maybe Steve Ballmer is smarter than we MS-critics imagined.
          John L. Ries
      • what I think Microsoft could

        Have make something good with Yahoo. But yes the offer was on the high side.
        Emmanuel Fransson
        • Not sure MS would had done anything to good

          MS is now the copycat trying to catch up to others.

          That is not what Yahoo needs to survive. They need somebody who is a visionary, somebody who would bring new ideas to the table. They have to not only be better than the completion, they have to provide new services that others don't have ... and they have to be the 1st to gain the brand name recognition.
          wackoae
          • copy cat?

            Metro is nothing like other languages...
            Emmanuel Fransson
          • Here is a hint:

            #1- Metro is NOT a language. It is a UI (user interface)

            #2- Ever seen the UI of a LepFrog tech toy for toddlers ???
            wackoae