Yahoo on Tumblr: We won't 'screw it up'

Yahoo will now have to figure out how to grow Tumblr revenue without alienating its user base

Yahoo has confirmed widespread reports that it will acquire the popular blogging service Tumblr, and also promised not to "screw it up." The deal is worth about US$1.1 billion, nearly all in cash.

"Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business," Yahoo said in a statement on Monday. Tumblr CEO and founder David Karp will remain in that position and its "product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators," the statement added.

Yahoo is hoping Tumblr's fast growth and widespread appeal will give it a fresh foothold in the competitive social media advertising market. Tumblr has 120,000 new users sign up each day and 300 million unique visitors monthly, Yahoo said.

Combined, the companies will boost Yahoo's audience by 50 percent, reaching more than 1 billion visitors per month, according to the announcement.

Yahoo may be wise to emphasize at the outset that it plans to handle Tumblr with kid gloves.

The service has a solid base of devoted users who are passionate about its creative and community-building power and their fear of the effects of commercialization under Yahoo is palpable, according to Gartner analyst Andrew Frank.

"They fear loss of control over the interface, over privacy, and over the freedom of expression in general," Frank said via email.

The price Yahoo is paying for Tumblr is more than 84 times the $13 million in revenue Tumblr generated last year, a considerable multiple in any acquisition.

A big challenge for Yahoo, therefore, will be to determine how to boost the revenue of Tumblr, which is currently very light on ads, without ruining the experience for users, according to Forrester Research analyst Zachary Reiss-Davis .

This is just the latest attempt by Yahoo to jump-start its business by scooping up a hot social media property, and it remains to be seen what reward Yahoo will reap from this deal.

Deals that didn't deliver the expected results include Yahoo's acquisitions of social bookmarking site Delicious, blog social network MyBlogLog and enterprise email vendor Zimbra.

Tumblr and Yahoo officials are expected to discuss the deal further during a conference call on Monday.

(With reporting by Juan Carlos Perez in Miami and Zach Miners in San Francisco.)

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Data has the power to build or burn brands

A brand can be severely wounded by use or misuse of any of its assets and you could say data has the greatest power of all to inflict damage.

Lucy Acheson

Head of data strategy and customer experience, LIDA

Totto and your inorganic future

At Cannes Lions this year we’ve been treated to many artificial intelligence (AI) insights. It’s one of the major discourses of our time.

Richard Brett

CEO, opr

Personas of one and the rise of ‘always there’ marketing

I’ve got some bad news. The ‘always on’ marketing approach that many companies have only just fully implemented is already out of date.

Nigel Roberts

Founding partner and strategy lead, Yell

I am a new satisfied customer with the cryptodriven darkwebsolutions company, they helped me with a very efficient crypter for my company...

Yusef

The CX thinking behind Westfield A/NZ's new brand and digital identity

Read more

I enjoyed reading your article. It all starts from creating a persona of your ideal customer. Once you understand the needs then you can ...

Ardie Cash

4 skills needed for a marketer to sit on boards

Read more

A very prestigious list. Cant wait to see who ends up in this years list. Cheers!!

Diganto

CMO50 2018 is now open for submissions

Read more

Hi, where can I read about the results of the recent Salesforce Digital Advertising 2020 report? I would very much like to look at the an...

Milla Cross

Salesforce chief strategy officer: Why it’s a transformative time for customer service

Read more

I have had that scenario with the mail happen so many times! I never thought anything of it, maybe because I have become desensitized. I ...

Diana Da Silva

Data has the power to build or burn brands - Data-driven marketing - CMO Australia

Read more

Latest Podcast

More podcasts

Sign in