The rumor mill got it right.
Late Sunday, soft confirmations began to emerge that Yahoo’s board had just approved the purchase of blogging site Tumblr for $1.1 billion in cash.
The mega deal brings into the Yahoo family some 108 million blogging sites on Tumblr. The acquisition instantly makes Yahoo one of the giants in the contemporary social media landscape.
Yahoo’s plans for Tumblr are fairly straightforward. The company will be independently operated as a separate business “per the agreement and our promise not to screw it up,” both companies said Monday.
We’re told that Tumblr CEO and founder David Karp will remain in his position as chief executive.
Yahoo Chief Executive Marissa Mayer’s deal for Tumblr gives Yahoo, one of the original big Internet companies, a fast-growing Web service that could fill one of its many holes—namely, the lack of a thriving social-networking and communications hub. Tumblr is popular with many younger adults, in contrast with Yahoo’s older customer base. Tumblr is also growing more quickly on smartphones than Yahoo.
According to The Wall Street Journal, this deal “highlights the shifting balance of power in the technology business.”
Do you think Yahoo made the right move?