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Yahoo 'to buy Tumblr for $1.1bn' Yahoo to buy Tumblr for $1.1bn
(about 17 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 has agreed a deal to buy New York-based blogging service Tumblr for $1.1bn (£723m; 857m euros) in cash.
The acquisition is expected to be announced as early as Monday. Yahoo's chief executive Marissa Mayer said that as part of its promise "not to screw it up", Tumblr would operate independently.
The deal was a "foregone conclusion" and was unanimously voted for by the board, tech blog AllThingsD reported, citing sources close to the matter. David Karp, will continue as chief executive officer of Tumblr.
If confirmed, it will be CEO Marissa Mayer's largest deal since taking the helm of Yahoo in July 2012. The deal is the largest made by Ms Mayer since she took the helm at Yahoo last July, and she described the acquisition as a "unique opportunity."
Neither Yahoo nor Tumblr responded immediately to requests for comment. "On many levels, Tumblr and Yahoo couldn't be more different, but at the same time, they couldn't be more complementary," added Ms Mayer.
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. Mr Karp, 26, who owns 25% of the privately-owned company he co-founded with Marco Arment in 2007, said he was "elated" to have the support of Yahoo.
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. "Tumblr gets better faster with more resources to draw from," he added. Mr Karp emphasised that neither its aims or team was changing as a result of Yahoo's purchase.
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. Mobile devices
Premium price The $1.1bn price tag for Tumblr represents a significant premium on its $800m valuation when it last raised money from private investors.
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.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.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.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.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 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. It is unclear whether the deal with Yahoo will 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.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.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.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.