Yahoo acquires Tumblr for $1.1 Billion

posted by

Sarah Lewis

on Thursday, May 23rd, 2013

Yahoo has announced its acquisition of Tumblr in a $1.1 billion cash deal that has created many conversations about the future for both sites.

Overview

Tumblr will remain independently operated, with founder David Karp, staying on as CEO. Yahoo aims to keep Tumblr close to its current form, without any Yahoo branding on the site
This deal will bring Yahoo’s monthly unique visitors to approximately 1 billion, with 700,000 visiting existing Yahoo sites and over 300,000 using Tumblr
The deal is predicted to introduce a significant amount of young, tech savvy people to Yahoo and attract more advertisers to buying space on Yahoo sites. Tumblr is expected to bring Yahoo advertising revenue by driving the sale of more ads, creating opportunities for Yahoo to sell more effective ads and increasing targeted ad sales
The top question on everyone's mind is how Yahoo is going to monetize Tumblr
Outside of Yahoo’s acquisition of Tumblr, Yahoo has attracted investors with Yahoo’s stake in China’s Alibaba and Yahoo Japan, which have helped grow Yahoo’s shares 60% since Mayer became CEO last summer

Key Takeaways

For users, Tumblr is different from traditional websites because of the use of interactive advertising. Critics wonder if Yahoo will integrate the more traditional, pay per click, model of advertising and are skeptical that Tumblr users will react positively to the pay per click ads
For brands and advertisers, they may be weary of placing advertisements on Tumblr pages because Tumblr’s content is scarcely monitored and several Tumblr pages exist that have graphic, unregulated, content with which brands may not want to associate
Some Tumblr users have transitioned their blogs to the Wordpress platform in an effort to avoid integrated advertisements
Yahoo is expected to benefit from access to Tumblr’s mobile app technology. Among iOS users, Tumblr’s app is ranked higher than all Yahoo apps and on Android OS Tumblr is outranked by only the Yahoo Mail app

Looking for more info? Check out these recent articles about the acquisition:

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