In a blockbuster acquisition announced Monday, Yahoo Inc. announced it has reached a definitive agreement to acquire social media network Tumblr in a deal worth US$1.1 billion, which will substantially be payable in cash.
According to Yahoo, and per its “promise not to screw it up” Tumblr will be independently operated as a separate business, with David Karp remaining as CEO.
“The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators,” said Yahoo, in a statement.
Tumblr claims more than 300 million monthly unique visitors, 120,000 signups daily and 900 posts per second. More than half of Tumblr’s users are using its mobile app for an average of 7 sessions per day. Yahoo said it expects the combination of Tumblr and Yahoo to grow Yahoo!’s audience by 50 per cent, and traffic by 20 per cent.
“Tumblr is redefining creative expression online,” said Yahoo CEO Marissa Mayer, in a statement. “On many levels, Tumblr and Yahoo couldn’t be more different, but, at the same time, they couldn’t be more complementary. Yahoo is the Internet’s original media network. Tumblr is the Internet’s fastest-growing media frenzy. Both companies are homes for brands – established and emerging. And, fundamentally, Tumblr and Yahoo are both all about users, design, and finding surprise and inspiration amidst the everyday.”
Tumblr will deploy Yahoo’s personalization technology and search infrastructure to help its users find content, and the companies will work together to create advertising opportunities.
And Tumblr’s Karp reinforced the no major changes message.
“Our team isn’t changing. Our roadmap isn’t changing. And our mission — to empower creators to make their best work and get it in front of the audience they deserve — certainly isn’t changing. But we’re elated to have the support of Yahoo! and their team who share our dream to make the Internet the ultimate creative canvas,” said Karp, in a statement. “Tumblr gets better faster with more resources to draw from.”
The transaction is expected to close in the second half of the year.