{"id":84248,"date":"2013-05-20T18:51:41","date_gmt":"2013-05-20T18:51:41","guid":{"rendered":"http:\/\/ghana-mma.com\/2013\/05\/yahoo-eyes-growth-youth-in-1-1-bn-tumblr-deal\/"},"modified":"2013-05-20T18:51:41","modified_gmt":"2013-05-20T18:51:41","slug":"yahoo-eyes-growth-youth-in-1-1-bn-tumblr-deal","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2013\/05\/20\/yahoo-eyes-growth-youth-in-1-1-bn-tumblr-deal\/","title":{"rendered":"Yahoo! eyes growth, youth in $1.1 bn Tumblr deal"},"content":{"rendered":"
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NEW YORK \u2013 Yahoo! unveiled its biggest deal yet under chief Marissa Mayer on Monday, snagging blogging platform Tumblr for $1.1 billion in a move to get younger users into the orbit of the struggling Internet pioneer.<\/p>\n

The two firms confirmed weekend reports of the tie-up, a deal which keeps the fast-growing Tumblr largely independent while integrating technology and advertising opportunities.<\/p>\n

\u201cTumblr is a game changer,\u201d Mayer said in a conference call discussing the acquisition.<\/p>\n

\u201cTumblr is one of the fastest growing media networks in the world,\u201d and \u201cbrings a significant new community of users to Yahoo!\u201d she added.<\/p>\n

\u201cThis will grow Yahoo! users by 50 percent.\u201d<\/p>\n

The companies said the deal is worth $1.1 billion, \u201csubstantially all of which is payable in cash.\u201d Yahoo! chief financial officer Ken Goldman said it includes \u201ca small amount of stock\u201d for Tumblr founder and CEO David Karp.<\/p>\n

Mayer said Tumblr would operate independently but that the groups would \u201cwork together to create advertising opportunities that are seamless and enhance user experience.\u201d<\/p>\n

\u201cWe promise not to screw it up,\u201d Mayer said in a blog post on Tumblr, as Yahoo! moved its official company blog to the new platform.<\/p>\n

\u201cThe product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve.\u201d<\/p>\n

Karp, in his own blog post, said he was \u201celated\u201d about the tie-up and sought to allay staff concerns about any changes.<\/p>\n

\u201cWe\u2019re not turning purple,\u201d he wrote. \u201cOur headquarters isn\u2019t moving. Our team isn\u2019t changing. Our roadmap isn\u2019t changing\u2026 So what\u2019s new? Simply, Tumblr gets better faster. The work ahead of us remains the same \u2014 and we still have a long way to go! \u2014 but with more resources to draw from.\u201d<\/p>\n

The deal, approved by the boards of both firms, is expected to close in the second half of the year, the companies said.<\/p>\n

Yahoo! has been looking at a range of possible acquisitions since Mayer took the helm last year and vowed to revive the company, which has faded in the face of competition from Google.<\/p>\n

Tumblr could be key to Yahoo!\u2019s strategy because of its popularity with younger Internet users. A survey this year conducted by the online data group Survata found Tumblr more popular than Facebook among those aged 13 to 25.<\/p>\n

While Tumblr generates very little cash, bringing it in the Yahoo! family could offer the potential for new advertising and other revenue sources.<\/p>\n

\u201cWe hope this significantly contributes to our growth story,\u201d Mayer said, adding that the two firms can create synergies because of their different demographics.<\/p>\n

She noted that Yahoo! can integrate some Tumblr \u201cstreams\u201d in its news and mobile feeds and can help the blogging platform develop better ads for its users.<\/p>\n

\u201cTumblr is growing, and we think it can enhance the engagement on our media properties,\u201d she said.<\/p>\n

Analyst reaction was mixed.<\/p>\n

Roger Kay at Endpoint Technologies said the deal \u201cbrings a social element that Yahoo! is missing and a set of new users.\u201d<\/p>\n

But Kay added that \u201cpaying $1.1 billion for a company with $13 million in revenue seems a little nuts to me\u2026 Those numbers aren\u2019t even earnings, which are surely negative. So, even if Tumblr survives intact, Yahoo is unlikely to get its $1.1 billion back over any interval that falls within a human lifetime.\u201d<\/p>\n

Justin Post at Bank of America\/Merrill Lynch said Tumblr \u201ccould increase engagement with a younger audience\u201d for Yahoo!.<\/p>\n

\u201cYahoo!\u2019s plan to integrate Tumblr content into Yahoo!\u2019s properties will be an important aspect of the deal,\u201d Post said.<\/p>\n

\u201cTumblr should also provide Yahoo more targeted user data as users indicate what content or whom they follow, which could increase the value of Yahoo! network.\u201d<\/p>\n

Victor Anthony at Topeka Capital Markets called the deal \u201cpositive for Yahoo!, giving the company access to one of fastest growing social media assets, as well as access to the teen demographic.\u201d<\/p>\n

Rob Enderle, analyst and consultant with Enderle Group, was skeptical.<\/p>\n

\u201cThe concept is good, the service goes after a young demographic Yahoo! is missing,\u201d he said.<\/p>\n

\u201cBut I have no evidence that Meyer knows how to do an acquisition like this\u2026 the chances this will end badly are very high.\u201d<\/p>\n

Founded in 2007 and headquartered in New York, Tumblr says it has more than 108 million blogs, 50 billion postings in 12 languages and 175 employees. The website ranking site Alexa lists Tumblr as number 32 in terms of global popularity. (AFP)<\/p>\n<\/div>\n

Comments are moderated. Please keep them clean and brief.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"

NEW YORK \u2013 Yahoo! unveiled its biggest deal yet under chief Marissa Mayer on Monday, snagging blogging platform Tumblr for $1.1 billion in a move to get younger users into the orbit of the struggling Internet pioneer. The two firms confirmed weekend reports of the tie-up, a deal which keeps the fast-growing Tumblr largely independent […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-84248","post","type-post","status-publish","format-standard"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/posts\/84248","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/comments?post=84248"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/posts\/84248\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/media?parent=84248"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/categories?post=84248"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2013\/wp-json\/wp\/v2\/tags?post=84248"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}