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Yahoo To Buy Tumblr For $1.1 Billion; Three-Way Photo Battle With Facebook And Twitter?

Submitted by on May 20, 2013 – 9:04 amNo Comment
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The Wall Street Journal and AllThingsD are now reporting that the Yahoo board of directors has approved a plan to buy photo sharing site Tumblr for an all-cash deal of $1.1 billion. Assuming the deal is accepted by Tumblr (which is expected to be a formality), the move could create a third party in the photo-sharing battle currently underway between Facebook and Twitter.

According to AllThingsD, the board vote was unanimous and “a forgone conclusion.” Yahoo CEO Marissa Mayer reportedly believes Tumblr, which the article describes as a “New York-based hipster blogging service,” will inject its ailing new parent company with a much needed dose of young users and user-generated content.

Meanwhile, Yahoo can offer Tumblr infrastructure, guidance on advertising and monetization, and the aformentioned piles of money.

(And if you’re like me and thought that “all-cash deal” means Tumblr CEO David Karp would get a bunch of silver briefcases stuffed with stacks of bills, you’re probably wrong: it just means no stock is exchanged.)

Mayer has been CEO of Yahoo for less than a year, and has already overseen ten acquisitions. The company’s stock price has risen 70% under her tenure.

The move also puts Yahoo in direct competition with other major photosharing sites already duking it out. Instagram was acquired by Facebook for $1 billion last year; almost immediately, sharing Twitter photos on Facebook became more difficult. At the same time, Twitter has aggressively expanded its photo and video sharing options.

What do you think? Is Yahoo’s purchase a good move?

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