Yahoo has now officially confirmed that it is buying blogging platform Tumblr for $1.1 billion mostly in cash, after reports on an impending deal first surfaced last week. It says it will keep it as an independent company, with founder David Karp at the helm as 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,” it writes.
The deal will close in the second half of this year.
With a lot of negative comments coming in from Tumblr users in lead-up to the deal, and some competitors claiming that they’re witnessing a kind of exodus from Tumblr as a result, Karp has also weighed in with his own announcement about the deal, emphasizing the same independence line: “We’re not turning purple,” he wrote:
“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.”
Karp also points out that Tumblr, joining up with the “original Internet company,” will be getting more resources to create the “ultimate creative canvas.” Some users have complained about certain features around the site, such as how video works, so the implication here is that areas like this will be addressed faster from now on, but — again — in a way that “doesn’t compromise the community and product we love.”
To get into the spirit of things, Marissa Mayer has fired up her very own Tumblr account and has posted on the news herself, complete with her own GIF to commemorate the deal (and, yes, also respond to the negativity):
Although both Karp and Mayer are pushing hard on the “we will not screw this up” line, there are of course business reasons behind it.
The deal, as many have pointed out, will give Yahoo not just access to more younger users (Tumblr is strongest in the 18-24 age bracket), but a fast-growing number of consumers who are in general very engaged online. Yahoo notes that Tumblr currently has 300 million monthly unique visitors and is growing by 120,000 signups every day, “one of the fastest-growing media networks in the world” with 900 posts per second and 24 billion minutes spent on site each month. There is also a strong mobile story that fits with Yahoo’s new emphasis on that platform: more than half of Tumblr’s mobile users using the mobile app on an average of 7 sessions per day.
Yahoo says it expects Tumblr to expand Yahoo!’s audience by 50% to more than a billion monthly visitors, and to grow traffic by approximately 20%.
That’s presuming there will be advertising against all of that content and all of those users. While Yahoo and Tumblr say that we won’t be seeing the birth of Yahooblr here, it’s also careful to note that advertising and Yahoo’s other monetizing services will most certainly be finding a place at Tumblr.
Tumblr, it appears, will be using Yahoo’s “personalization technology” and search infrastructure in its services to help users find content that fits their interests better. This is directly connected to advertising: “In turn, Tumblr brings 50 billion blog posts (and 75 million more arriving each day) to Yahoo!’s media network and search experiences,” Yahoo writes. Still, these apparently won’t be standard Yahoo display ads like the ones we see everywhere else: “The two companies will also work together to create advertising opportunities that are seamless and enhance the user experience.”
Tumblr has been working on services like this for some time, for example with its Spotlight highlighting Tumblrs from brands. This last year helped the company make some $13 million in revenues — not much by Yahoo standards. It will be interesting to see whether Yahoo will be able to raise that figure without lowering the others around usage that attracted it to Tumblr in the first place.
The companies are holding a conference call at 9am Eastern time; we’ll be listening in and updating from that.