[Infowarrior] - Yahoo to Buy Tumblr for $1.1 Billion

[Richard Forno]

	• BUSINESS
	• Updated May 19, 2013, 2:00 p.m. ET

Yahoo to Buy Tumblr for $1.1 Billion

http://online.wsj.com/article/SB10001424127887324787004578493130789235150.html

By JOANN S. LUBLIN, AMIR EFRATI and SPENCER E. ANTE

Yahoo Inc.'s YHOO -0.23% board has approved a deal to acquire blogging startup Tumblr, people familiar with the matter said Sunday.

Yahoo has agreed to pay $1.1 billion in cash for the company, one of the people said. Tumblr would continue to operate largely as an independent business, the people said.

It wasn't immediately clear whether Tumblr's board had also approved the deal. Spokesmen for Yahoo and Tumblr didn't immediately respond to requests for comment.

Yahoo's board approved the deal in a meeting by telephone on Friday, one of the people said. A deal could be announced as soon as Monday, the person said.

Tumblr, founded in 2007, fast built a following by making it easy for people to post blogs and photos, follow other people on Tumblr and receive updates via a feed. The website's simple design has lowered the bar for online publishing and effectively merged blogging with social media.

By acquiring Tumblr, Yahoo would instantly gain a social-media site that has become a hub of communication and blogging for millions of people, but one that generates little revenue.

Tumblr Chief Executive David Karp has focused on building the company's user base for its minimalist blogging platform while leaving for later the question of earning money. It is a pattern typical for young Internet companies.

Tumblr began placing ads on its service last year. Mr. Karp, who once told the Los Angeles Times that he was "pretty opposed to advertising," said in recent media reports that Tumblr generated $13 million in revenue last year.

People familiar with the matter said Yahoo believes it could help Tumblr bring in more money by selling ads, boosting its own revenue in the process.

Tumblr has grown quickly. In March, the blogging site had about 117 million unique users world-wide, up from about 58 million a year earlier, according to comScore Inc. SCOR +3.85% On smartphones, Tumblr had almost 12 million unique visitors, up from about four million a year earlier, comScore said.

Yahoo has a bigger presence on mobile devices but it is growing much slower. In March, Yahoo claimed about 84 million unique smartphone visitors, up from around 63 million a year earlier, comScore said.

Yahoo Chief Executive Marissa Mayer, who joined the company last summer after a 13-year career at Google Inc., GOOG +0.59% became interested in the blogging site a couple of months ago, one of the people familiar with the matter said. Acquisitions have long been expected to be part of Ms. Mayer's strategy, though to date she only has acquired small companies—primarily for their engineering and product-management talent.

Yahoo recently pulled out of a roughly $200 million deal to buy a controlling interest in the video website Dailymotion, owned by France Télécom SA, FTE.FR +0.23% after the French government indicated objections to the transaction, people familiar with the matter have said.

Yahoo would be paying a premium for Tumblr. When Tumblr last raised money, in the fall of 2011, the $85 million venture-capital investment it received valued the New York company at $800 million.

On Monday, Yahoo will also deliver an update about its Flickr photo-sharing unit, a person familiar with matter said.


---
Just because i'm near the punchbowl doesn't mean I'm also drinking from it.