Ending speculation from last week, Internet company Yahoo! is announcing that it has reached a definitive agreement to acquire short-form blogging platform Tumblr. The acquisition is being undertaken at a total consideration of approximately $1.1 billion, substantially all of which will be payable in cash, the Sunnyvale, California-headquartered company said in a press release. The transaction is expected to close in the second half of the year, subject to customary closing conditions.
The New York-headquartered Tumblr will continue to operate independently as a separate business and founder David Karp will continue as it CEO, said the release.
Addressing the Tumblr community, post-acquisition, Karp blogs at the Tumblr Staff Blog:
Everyone, I’m elated to tell you that Tumblr will be joining Yahoo.
Before touching on how awesome this is, let me try to allay any concerns: We’re not turning purple. Our headquarters isn’t moving. Our team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn’t changing.
So what’s new? Simply, Tumblr gets better faster. The work ahead of us remains the same – and we still have a long way to go! – but with more resources to draw from.
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. Plus both our logos end with punctuation!
As always, everything that Tumblr is, we owe to this unbelievable community. We won’t let you down.
Karp, who turns 27 in a couple of months, founded Tumblr in 2007. Born and raised in New York, he attended the Bronx High School Science before dropping out at the age of 15. An internship at Frederator Studios led to Karp heading product development at UrbanBaby. When CNET acquired the UrbanBay in 2005, he started his own development agency, Davidville, which eventually led to Tumblr.
Over at her own Tumblr blog, Yahoo CEO Marissa Mayer writes:
I’m delighted to announce that we’ve reached an agreement to acquire Tumblr!
We promise not to screw it up. Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently. David Karp will remain CEO. The product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve. Yahoo! will help Tumblr get even better, faster.
The combination of Tumblr and Yahoo is expected to grow Yahoo’s audience by 50 percent to more than a billion monthly visitors, and grow traffic by approximately 20 percent. The deal, says the press release, offers unique opportunities for both companies. Tumblr can deploy Yahoo’s personalization technology and search infrastructure to help its users discover creators, bloggers, and content. In turn, Tumblr brings 50 billion blog posts (and 75 million more arriving each day) to Yahoo’s media network and search experiences. The two companies will also work together to create advertising opportunities that are seamless and enhance the user experience.
Tumblr Fast Facts
Founded: February 2007. Employees: 175. Headquarters: New York City. Blogs: 108.6 million. Posts: 50.9 billion. Daily posts: 82.1 million
Tumblr has raised a total of $125 million from venture capital investors till date, according to CrunchBase. It started with a $750,000 Series A round in 2007 from Spark Capital, Union Square Ventures and others. Sequoia Capital joined the party in November 2010, participating in a $30 million Series D round. The last round was in September 2011, which saw the company raise $85 million from GreyLock Partners, Insight Venture Partners, The Chernin Group, Sequoia, Spark Capital, Union Square Ventures, CrunchFund and DFJ Growth.
Catch up on the post-acquisition coverage around the Web:
- Yahoo takes big leap with $1.1 billion deal for Tumblr (Source: WSJ)
- Done deal: Yahoo acquires Tumblr appx $1.1 billion; promises not to screw it up (Source: The Next Web)
- Yahoo’s Tumblr buy fails four tests of a successful acquisition (Source: Forbes)
- Yahoo buys startup Tumblr for $1.1 billion (Source: Financial Times)
- Yahoo promises not to ‘screw it up’ over $1.1 billion Tumblr deal (Source: TheGuardian)
Top image credit: Wikimedia Commons. Logos credit: Yahoo, Tumblr