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Yahoo to buy Tumblr for $1.1bn | |
(about 17 hours later) | |
Yahoo has agreed a deal to buy New York-based blogging service Tumblr for $1.1bn (£723m; 857m euros) in cash. | |
Yahoo's chief executive Marissa Mayer said that as part of its promise "not to screw it up", Tumblr would operate independently. | |
David Karp, will continue as chief executive officer of Tumblr. | |
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." | |
"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. | |
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. | |
"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. | |
Mobile devices | |
The $1.1bn price tag for Tumblr represents a significant premium on its $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 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. |