Yahoo Drops $1B for Tumblr, Promises Not to Ruin It

Following the deal, Yahoo expects a massive traffic boost by avoiding the fate that befell Flickr.

Yahoo announced today that it is acquiring the popular, mobile-friendly micro-blogging site Tumblr in an all-cash deal valued at approximately $1.1 billion. "Tumblr will be independently operated as a separate business," announced Yahoo as part of the company's "promise not to screw it up," suggesting that Yahoo is applying the lessons it learned after buying Flickr in March 2005.

When Yahoo acquired the popular photo sharing site for a reported $35 million, Flickr co-founder Caterina Fake struck an optimistic tone in a blog post. "We’ll be working with a bunch of people that Totally Get Flickr and want to preserve the community and the flavor of what is here. We’re going to grow and change, but we’re in it for the long haul, with the same management and same team," she wrote.

Caterina Fake and Stewart Butterfield, then the husband and wife team behind Flickr, left in 2008 amid several other high-profile defections at Yahoo. In subsequent years, Flickr's position as the leading image sharing site and a mecca for photography enthusiasts eroded as it suffered highly-publicized integration challenges and faced competition from services that emphasized mobile and social media. One notable challenger, Instagram, was acquired by Facebook for $1 billion last year.

This time, Yahoo hopes things will be different.

"David Karp will remain CEO," announced the company. Karp signaled that he and Yahoo CEO Marissa Meyer will attempt to avoid a repeat of Flickr's fall.

"Yahoo is the original Internet company, and Marissa and her team share our dream to make the Internet the ultimate creative canvas. I couldn’t be more excited to have her help. We also share a vision for Tumblr’s business that doesn’t compromise the community and product we love," he wrote on Tumblr's official feed.

Describing Tumblr as one of the "most compelling daily habits online today" during a conference call today, Meyer said her company believes that "we believe the addition of Tumblr is an incredible step forward and an accelerator in Yahoo's growth story." That step is made possible, in large part, by Tumblr's massive user base.

"Tumblr brings with it some very impressive statistics around users and content," said Mayer. They include "more than 300 million monthly users" and "120,000 daily sign-ups," she said. Tumblr users also spend a lot of time on the platform, in fact "24 billion minutes [are] spent on-site each month," she informed.

"Tumblr is one of the fastest growing media networks in the world," stated Mayer and added that "Tumblr has 105 million blogs and 50 billion posts." For Yahoo, the deal will add a healthy 20 percent bump in traffic. Yahoo's audience is expected to grow by "50 percent to more than a billion monthly visitors," according to the company.

The companies expect the deal to close during the second half of the year pending customary closing conditions.

Pedro Hernandez is a contributing editor at Datamation and InternetNews.com. Follow him on Twitter @ecoINSITE.




Tags: social media, Yahoo, Tumblr


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