Yahoo! Acquires Tumblr for $1.1 Billion, “Promises Not to Screw it Up”

Posted on May 20, 2013 12:09 PM by Rob Williams

It sure didn’t take long for this rumor to be confirmed: Yahoo! is purchasing popular microblogging service Tumblr for $1.1 billion in cash. This marks the first major acquisition that Yahoo! has made since ex-Googler Marissa Mayer took over as CEO last summer, and it’s one that helps bolster the company’s social networking presence. The deal is expected to complete during the second-half of 2013.

Leading up to this official announcement, Tumblr caught quite a bit of flak for even considering the deal. It seems many Tumblr members don’t want to be associated with Yahoo! – so much so, that they’re willing to go through the hassle of packing it in and moving to a competitor. Yahoo! beat out the likes of Microsoft and Facebook in the hunt for the acquisition.

According to WordPress CEO Matt Mullenweg, those expressing distaste with the acquisition are proving that they weren’t just mouthing off. Once the acquisition came to light over the weekend, WordPress experienced a major surge of user moves from Tumblr to its own platform. On a normal day, the company exhibits 400 – 600 of these moves an hour. After the¬†acquisition¬†leaked out, that skyrocketed to 72,000 an hour.

Yahoo and Tumbler

Yahoo! is far from ignorant of the fact that some people don’t want their favorite microblogging platform ruined, even going as far to state that the company “promises to not screw it up” right in its press release. How often do you see a professional press release written like that?

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. The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators.

The interesting thing about this statement is that Tumblr earned a mere $13 million in 2012, about 1/84th of this entire acquisition fee. Yahoo! seems interested in leaving Tumblr as it is, but how is it going to justify the purchase? Simply tossing a bunch of ads into user blogs isn’t a safe bet. It seems likely the company is going to work towards tight integration between Tumblr and its other services, and given that Tumblr enjoys over 300 million unique monthly visitors, this could just deliver the revitalization that the company needs.

  • Kayden

    For once an acquisition where I am not concerned that the property would be water downed or cut up and dispersed.

    • Rob Williams

      If I were a Tumblr user, I wouldn’t be pleased with this acquisition. I’d almost trust it more in Google’s hands than Yahoo!’s.

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