Yahoo’s board approves Tumblr acquisition

It looks like Tumblr will be purchased by Yahoo after all. According to The Wall Street Journal, Yahoo’s board of directors has approved the acquisition of Tumblr in an all-cash deal worth $1.1 billion. David Karp, the founder of Tumblr and a 25% shareholder has also accepted the terms of the deal.  Karp has also agreed to stay on for at least four years, according to ATD. The WSJ says Tumblr would remain an independent company.

CEO Marissa Mayer is scheduled to announce the acquisition at a media event tomorrow in New York City.


comScore pegged Tumblr’s worldwide traffic at 117 million visitors in April. The site has raised about $125 million in funding, putting its valuation at $800 million.  Tumblr is seen as that cool place to quickly create a blog and post photos, vidoes, music etc. This is certainly an interesting pick up for Yahoo.

It remains to be seen how this sale will affect the content and structure of Tumblr. There are reports of definitive promises by Yahoo CEO Marissa Mayer to once-sale-shy Tumblr CEO David Karp to allow him to shepherd the fast-growing blogging product and with no forced integration with Yahoo’s other many content properties.  Changes will mainly include more back-end changes to marry infrastructure and to grow the advertising business and giving it more distribution opportunities.

“At the beginning, at least, it’ll be hands off,” said one person close to the situation. “It has to be.”

That said, Yahoo execs discussed and are aware of pre bankruptcy class online, although they believe it to be fixable over time.

As Peter Kafka noted:

To spell that out: Tumblr’s advertisers don’t have to worry about their stuff showing up on blogs like We Want Porn. At worst, it’s possible that they’ll end up advertising to a user whose dashboard includes posts from We Want Porn. But in general, they ought to be pretty well insulated from that stuff.

By the same token, if Yahoo wanted to, it could end up scrubbing Tumblr of porn, and losing a lot of users and views — but it probably wouldn’t lose much in the way of monetizable users. Unless it turns out that the majority of Tumblr’s core users have signed on exclusively to use porn.

Or, as a Tumblr investor also told Kafka: “Non-story. Tumblr is the Internet. It’s a dashboard follower model, opt-in.”