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Yahoo looking to buy Tumblr

Yahoo is reported to be in talks with Tumblr as it is looking to acquire the blogging service for around $1 billion (£656.2 million).

According to “sources close to the situation”, Yahoo is looking to invest or acquire in New York-based blogging service, Tumblr.

Marissa Mayer, Yahoo’s CEO, has reportedly been following Tumblr’s growth and has met with top executives at the company, including the CEO and found David Karp.

Tumblr has been raising funding since 2007 and has gathered $125 million so far, causing the company to now be worth around $800 million (£524.9 million). However, it is considering strategic investments from companies like Yahoo to boost its valuation to $1 billion (£656.2 million).

The blogging site already has 107.8 million Tumblr blogs and boasts statistics like 50.6 billion posts and 117 million monthly unique visitors.  For April alone, the site saw 37 million US desktop users, which was a similar figure to Twitter and LinkedIn, although Twitter has huge base of mobile users.

Yahoo has openly said it wants to engage with the 18 to 34-year-old age range, with Yahoo CFO Ken Goldman confessing at the JP Morgan Global Technology conference that the company needs to get “cool.”

“One of our challenges is we have had an aging demographic,” said Goldman. “Part of it is going to be just visibility again in making ourselves cool which we got away from for a couple of years.”

If Yahoo did acquire Tumblr, or made a major investment in the service, it could begin to appeal to the younger audience it requires, as the site already has a strong and youthful user base.

“If you could pick a company that fits in with what Marissa Mayer has demonstrated in her career – aesthetics software technology and fast-growing – you could not land on a better choice [than Tumblr],” said another source.

Tumblr said it generated $13 million (£8.5 million) in revenue last year after it began selling small native ads that promoted the brand’s Tumblr pages, featured on the users’ dashboards.  People close to the company say it may reach $100 million (£65.6 million) by the end of this year.

Next, read why Apple should fear the new, ruthless Google.

Via: AllThingsD

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