Yahoo and Tumblr announced today confirmed previous reports that they have reached a definitive agreement for Yahoo to acquire Tumblr.
According to the agreement, Tumblr will be independently operated as a separate business. David Karp will remain CEO. The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators.
With more than 300 million monthly unique visitors and 120,000 signups every day, Tumblr is one of the fastest-growing media networks in the world. On mobile, more than half of Tumblr?s users are using the mobile app and do an average of 7 sessions per day. Its popularity and engagement among creators, curators and audiences of all ages brings a significant new community of users to the Yahoo network. The combination of Tumblr+Yahoo! is expected to grow Yahoo?s audience by 50 percent to more than a billion monthly visitors, and to grow traffic by approximately 20 percent.
The deal offers opportunities for both companies. Tumblr can deploy Yahoo?s personalization technology and search infrastructure to help its users discover creators, bloggers, and content they?ll love. In turn, Tumblr brings 50 billion blog posts (and 75 million more arriving each day) to Yahoo?s media network and search. The two companies will also work together to create advertising opportunities.
Total consideration is approximately $1.1 billion, substantially all of which is payable in cash.
"Tumblr is redefining creative expression online," said Yahoo CEO Marissa Mayer. "On many levels, Tumblr and Yahoo couldn?t be more different, but, at the same time, they couldn?t be more complementary. Yahoo is the Internet?s original media network. Tumblr is the Internet?s fastest-growing media frenzy. Both companies are homes for brands - established and emerging. And, fundamentally, Tumblr and Yahoo! are both all about users, design, and finding surprise and inspiration amidst the everyday."
The transaction, which is subject to customary closing conditions, is expected to close in the second half of the year.
With the acquisition of Tumblr, no wonder Yahoo is looking for a way to bolster its ad platform, and Tumblr could be the perfect target as it offers a very large and young audience.
Yahoo's ad platform is not making as much as Yahoo would expect. Accordig to the company's first-quarter earnings, the web giant's display ads fell from $511 million in 2012 to $455 million in the same quarter a year later.