I’m delighted to announce that we’ve reached an... To Acquire Tumblr. SUNNYVALE, Calif. & NEW YORK--(BUSINESS WIRE)-- Yahoo! Inc. (YHOO) and Tumblr announced today that they have reached a definitive agreement for Yahoo! To acquire Tumblr. Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO. With more than 300 million monthly unique visitors and 120,000 signups every day, Tumblr is one of the fastest-growing media networks in the world.
The deal offers unique opportunities for both companies. Total consideration is approximately $1.1 billion, substantially all of which is payable in cash. “Tumblr is redefining creative expression online,” said Yahoo! “I’ve long held the view that in all things art and design, you can feel the spirit and demeanor of the creator. David Karp, CEO of Tumblr, addressed the Tumblr community, “Our team isn’t changing. The transaction, which is subject to customary closing conditions, is expected to close in the second half of the year. Marissamayer: First ever acquisition announced... Staff - News! Done deal: Yahoo acquires Tumblr for “approximately $1.1 billion”, promises “not to screw it up” It’s done, ladies and gentlemen. As expected, Yahoo this morning announced its acquisition of blogging phenomenon Tumblr. The Internet giant has bought the six-year old New York company for “approximately $1.1 billion”, substantially all of which will be paid in cash.
The news is in line with earlier reports from AllThingsD, which first broke the news of sale talks between both parties, as well as the New York Times and the Wall Street Journal. Amusingly, the press release says: “Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business.” Founder David Karp will remain at the helm as Tumblr’s CEO. He’ll also be worth a heck of a lot more. Yahoo CEO Marissa Mayer even took to Tumblr to repeat the promise of ‘not screwing up’ the marriage. First ever acquisition announced by animated gif :) @yahoo is acquiring @tumblr. finance.yahoo.com/news/yahoo-acq…#keepcalmandcarryon— marissamayer (@marissamayer) May 20, 2013 Top Image Credit: Yahoo!
Saroff's Place | On Yahoo & Tumblr: “We have vision, delusion and hallucination and I want to know which one this is.” “We have vision, delusion and hallucination and I want to know which one this is. . ” - quote anonymously attributed to Yahoo COO Henrique de Castro while an exec at Google. Looks like Yahoo may buy Tumblr for the sticker-shock price of $1.1 Billion.
Wow. Shareholders are invested in Yahoo for returns, not for cool. The power of math and corporate finance can build a good investment case for Yahoo/Tumblr. The opportunity cost of a $1.1B Tumblr purchase is $108mm/year. ($1.1B multiplied by Yahoo’s 9.8% WACC). According to Quantcast, Tumblr gets about 60B US page views/year. There are data points that can make that $1.79 hurdle rate much lower and strongly favor the acquisition. *Ad networks can fill display units at $1.79 and there are some hilarious, useful and beautiful tumblrs for which direct sold brand advertisers will pay 10x the remnant rate. *International doubles Tumblr’s size. *The WACC of 9.8% feels high. *Tumblr is likely to keep growing. This is a tough call. Why Yahoo Doesn't Think Tumblr Has a Porn Problem - Peter Kafka - Media. If you write about Tumblr as a business, you are required to note that Tumblr has a lot of porn.
How much porn? You’ll have to make something up, because the only people who know how much porn the blogging service hosts work at the blogging service, and they don’t offer up a number. But let’s stipulate, for argument’s sake, that there is indeed a lot of porn on Tumblr — in fact, the company’s terms of service make a point of saying it’s okay with “not suitable for work” stuff. Which means there are a lot of pages on Tumblr that advertisers won’t go near.
So why isn’t that an issue for Yahoo, which is very close to spending $1.1 billion on the company? Here it’s important to pay attention to the way Tumblr actually works — or more precisely, the two ways it works. Tumblr offers tools to make simple blog pages, which anyone with a Web browser can see. To spell that out: Tumblr’s advertisers don’t have to worry about their stuff showing up on blogs like We Want Porn. So: Problem? Yahoo! And Tumblr: It's About Display, Streams & Native at Scale. The world is atwitter about Tumblr’s big exit to Yahoo! , and from what I can tell it seems this one is going to really happen (ATD is covering it well). There are plenty of smart and appropriate takes on why this move makes sense (see GigaOm) but I think a lot of it boils down to the trends driving Yahoo’s massive display business. If there’s one thing we all know, it’s that a new form of native advertising is spreading throughout the Internet.
It started with Google and AdWords, it spread to Twitter and its Promoted Tweets, and Facebook quickly followed with Sponsored Stories. At FMP, we have sponsored posts and our Native Conversationalist suite, which we are scaling now across the “rest of the web” – the smaller but super influential independent sites that we believe are major suppliers of ”the oxygen of the Internet” – the content that drives true engagement. The reason native works is because the advertising is treated as a unit of content on the platform where it lives. Yahoo! Yahoo to Buy Tumblr for $1.1 Billion. Yahoo Tumblrs for Cool: Board Approves $1.1 Billion Deal as Expected - Kara Swisher - Media.
The Yahoo board has approved a massive $1.1 billion all-cash deal to buy Tumblr. It’s not clear when the official vote was taken, but sources close to the board said the acquisition was a foregone conclusion and was unanimously approved by the directors of Silicon Valley Internet giant. The deal will likely be announced Monday morning, said numerous sources. AllThingsD.com initially broke the story of the acquisition efforts and later followed up with details of the exact price and the board meeting to approve the transaction. There were no other competing bids, despite reports, to snap up the New York-based social blogging service.
That said, Tumblr had held some very preliminary discussions about various deals with Facebook, Google, Microsoft and also Twitter earlier this year. Yahoo had been mulling some kind of deal with Tumblr, from a strategic investment to an outright acquisition, for about six weeks. Tumblr’s mobile usage has also been strong, which also interested Mayer. Tumblr Deal Offers New York Startups Some Rare Affirmation. A roundtable of tech startups might be the only place you hear people say that they like New York City for its friendliness, positive reinforcement, and small-town feel. Yahoo’s (YHOO) $1 billion-plus acquisition of Tumblr marks the first time in years a New York startup has hit it so big, and the city’s tech set sees it as the victory it’s been pining for since Google (GOOG) bought DoubleClick for $3.1 billion in 2007. By many measures, the city’s tech scene has arrived in recent years. New York now draws 11.4 percent of venture capital deals in the U.S., passing New England to take over as Silicon Valley’s second fiddle.
Colleges such as New York University are increasingly trying to reinvent themselves along the lines of the Stanford model; Cornell and Technion, the Israel Institute of Technology, are launching a new technology school on Roosevelt Island. On the other hand, the time for Tumblr wannabes may have passed. But those are concerns for another day.