Yahoo announced that, Yahoo is going to buy new blogging service of Tumblr with the deal of US $1.1 billion cash.
In detail:
Tumblr is one of the Web's most popular hubs of so-called user-generated content, drawing young people who use the platform to post pictures and text. It has more than 100 million blogs in its network, ranging from "White Men Wearing Google Glass" - a collection of photos poking fun at the early adopters of the wearable computing devices - to housing-focused "The Worst Room."
Tumblr has 300 million monthly unique visitors and 120,000 sign-ups every day, with about 900 posts a second. But as much traffic as it generates, not all the content is ideal for advertisers.
The combination of Yahoo and Tumblr creates an online powerhouse with roughly one billion users, which will draw in more advertisers and help Yahoo keep visitors on its properties for longer periods of time, Mayer told Reuters in an interview.
Yahoo said that Tumblr will be independently operated as a separate business with Karp staying on as CEO. Yahoo CEO Marissa Mayer posted her own Tumblr post to try to assure fans of the site they need not panic. In a call with investors and analysts Monday, Mayer referred to the deal as a "game changer" for Yahoo. She said there will be no Yahoo branding on Tumblr.
One analyst who came up with a possible justification for the price is Saroff who estimated that Tumblr could generate $108 million in annual revenue. He sees a conservative scenario in which revenues would pay for the deal in under 10 years.
Yahoo Chief Financial Officer Ken Goldman said that while the deal is not expected to add much to Yahoo's results this year, he forecasts material gains in both profits and revenue by next year. The deal is expected to close in the second half of this year.
