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Yahoo 'to buy Tumblr for $1.1bn' | Yahoo 'to buy Tumblr for $1.1bn' |
(about 2 hours later) | |
Yahoo's board has approved a deal to buy New York-based blogging service Tumblr for $1.1bn (£725m), US media reports say. | Yahoo's board has approved a deal to buy New York-based blogging service Tumblr for $1.1bn (£725m), US media reports say. |
The acquisition is expected to be announced as early as Monday. | The acquisition is expected to be announced as early as Monday. |
The deal was a "foregone conclusion" and was unanimously voted for by the board, tech blog AllThingsD reported, citing sources close to the matter. | |
If confirmed, it will be CEO Marissa Mayer's largest deal since taking the helm of Yahoo in July 2012. | If confirmed, it will be CEO Marissa Mayer's largest deal since taking the helm of Yahoo in July 2012. |
Neither Yahoo nor Tumblr responded immediately to requests for comment. | |
Under the terms of the acquisition, Tumblr would continue to operate as an independent business, the Wall Street Journal said, citing unnamed sources familiar with the situation. | Under the terms of the acquisition, Tumblr would continue to operate as an independent business, the Wall Street Journal said, citing unnamed sources familiar with the situation. |
The company is currently run by David Karp, a 26-year-old New Yorker who founded Tumblr in 2007, and he is expected to remain in his role. | |
Analysts say that by acquiring Tumblr, Yahoo will gain a larger social media presence and enhance its ability to attract younger audiences in its battle with internet rivals Google and Facebook. | |
Premium price | |
Ms Mayer, a former Google executive, has already made a number of small acquisitions since taking over at Yahoo, but the Tumblr deal is expected to be the biggest. | |
A $1.1bn price tag would represent a significant premium on Tumblr's $800m valuation when it last raised money from private investors. | |
Tumblr combines elements of blogging with social networking, and its simple design has attracted millions of users since its launch. | |
According to its homepage, it now hosts 108 million blogs, with a total of 50.7 billion posts. | |
It also has a significant presence on mobile devices. | |
But despite its fast-growing user base it has struggled to make money, and has traditionally resisted advertising. | |
It announced that limited use of adverts would be rolled out in April last year, but made just $13m in revenues for 2012, according to a report by Forbes magazine. | |
It is unclear whether a deal with Yahoo would result in more adverts on Tumblr. | |
Yahoo remains a giant in the internet world, with around 700 million visitors to its website every month. The majority of its revenues come from advertising. | |
But it has limited mobile reach and lags behind Google in the search engine rankings. | |
It also shed more than 1,000 jobs during 2012 and has long been divided over whether it should focus on media content or on tools and technologies. |