Yahoo Buys Tumblr

Marissa Mayer and the Yahoo Board decided Tumblr is their comeback investment. According to AllthingsD.com, the  $1.1. billion deal is all cash and CEO Mayer has been considering the deal for the past few weeks after looking at the company for the past few months. The official announcement should come tomorrow.  As media sources report, Tumblr is expected to bring a younger crowd to Yahoo, update the company to the social media age, and hopefully translate into better earnings. But earnings would primarily be Yahoo’s job - Tumblr doesn’t delve into many ads and WSJ.com reports the company “generated $13 million in revenue last year”. 

David Karp, CEO of Tumblr will continue to be involved. AllthingsD.com reports “Karp would continue to operate the business, with Mayer promising him a level of autonomy… he will be locked in, sources said, via a four-year deal that will reward him for performance of the business." This is the biggest acquisition for Mayer as CEO. As an avid user of Tumblr, I don’t see any way that users will benefit from Yahoo. However, Karp has built a great platform and the only thing left to do is to monetize the company. Yahoo could provide ways to monetize the company with Karp working to keep users