SmilingCatWhat a deal for David Karp! Tumblr made 13 million last year and Yahoo just acquired the company for 1.1 million dollars. This grand purchase  is an effort to attract younger users and bring Yahoo back from the edge of the abyss.

We are told that nothing will change at Tumblr, they are not turning purple. Okay, it’s interesting to note that 11.6% of the content is porn. If mom didn’t know this before she will certainly know now.

The following article appeared in Bloomberg today:

Yahoo! Inc. (YHOO) is preparing to unveil updates to the company’s Flickr photo-sharing site today, amid reports that the board has approved a $1.1 billion acquisition of blogging network Tumblr Inc.

Yahoo Chief Executive Officer Marissa Mayer will detail changes to Flickr at a press event in New York, according to a person familiar with the matter, who asked not to be identified because the information is private. Yahoo’s directors authorized a purchase of Tumblr yesterday, the New York Times and Wall Street Journal reported, citing unidentified people familiar with the matter.

Mayer has been tweaking Yahoo’s services and adding features designed to win back users and advertisers who have fled the Web portal in favor of competing sites such as Facebook Inc. (FB) and Google Inc. (GOOG) (GOOG) Improvements to Flickr in December helped Yahoo top 300 million monthly mobile users, up from just 200 million at the end of the last year. An acquisition of Tumblr would add a social network of 108 million blogs that’s popular with a younger audience.

Founded in 2007 by entrepreneur David Karp, Tumblr had more than 13 billion global page views in the past month. The site recently began letting advertisers pay for prominent placement, putting the company on a path to achieve profitability this year, executives said in March.

Yahoo rose as much as 3.3 percent to $27.40 in trading before U.S. exchanges opened. The stock had gained 33 percent this year through yesterday.

Yahoo Turnaround

Tumblr would continue to operate as an independent business, the people told the Wall Street Journal. While Tumblr is based in New York, there were no indications that the event was related to a potential deal with Tumblr.

Katherine Barna, a spokeswoman for Tumblr, didn’t respond to multiple requests for comment. Sara Gorman, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment.

CEO since July, Mayer had little to show for her efforts to turn around the company as of last month, when Yahoo reported a drop in its main display-advertising business and issued a sales forecast for this quarter that may fall short of analysts’ estimates. Mayer’s push to revamp products such as Yahoo’s home page and e-mail have made little headway to reverse a decline in display, an area where Google (GOOG) and Facebook (FB) are gaining ground.

The Flickr announcement is related to invitations Yahoo sent to the press on May 17 for the New York event, the people with knowledge of the matter said at the time.

To contact the reporter on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

3 Comments on Yahoo’s Billion Dollar Buy: Is Tumblr a Smart Deal?

  1. Tin Lizzie says:

    Loved your intro :-)

  2. Carmen R. says:

    Thanks for this information. It will be interesting to see if the porn stuff is adjusted.

  3. Ma. says:

    Yep. Rest assured the young folks love it.

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