Yahoo purchase Tumblr million by 1100 - Público.pt

Yahoo confirmed the announced acquisition of Tumblr, for 1100 million dollars (855 million euros), and prepares to become a competitor in the race weight of social networks. Tumblr has one of the highest rates of growth of the Internet and its popularity among the younger took the American giant to open the purse strings.

The confirmation came in a statement from Yahoo, citing the company’s chief executive. Marissa Mayer emphasizes the importance of the acquisition, saying the popular social network of blogs “creative expression is redefining online .”

“A multilevel, Tumblr and Yahoo could not be more different, but at the same time, could not be more complementary,” says Mayer, establishing a link between the past and the future of the Internet. “Both companies are home brands – established and emerging.” But, “fundamentally” both are dedicated to improving the user experience, design and “surprise and find inspiration in the midst of everyday life,” he says.

According

Wall Street Journal , the board of directors of Yahoo has approved on Sunday the bid amount: 1100 million dollars. The statement on Monday states that this amount will be “substantially” paid in cash. It is the most expensive operation since Mayer took office. And also a risky bet – Tumblr does not have a sustainable business model.

worth?
Dan Primack, senior editor of Fortune magazine , given Twitter account of the strangeness that is causing business terms such as was being reported on Sunday: everything in cash (often this kind of acquisition involves the exchange of shares of companies involved). Primack says, taking into account the results of the first quarter of Yahoo, the company is only available in 1200 dollars. Worth betting almost everything on the purchase of a social network?

Tumblr is run by David Karp, 26, who began designing and programming websites to 11 and left school at 15. At 21, in 2007, founded the Tumblr (from the bedroom in his mother’s apartment in New York). Since then, this mix of platform blogs and social network visually very cool , which allows you to share all kinds of content quickly grew to become one of the most popular sites in the world.

Karp will keep ahead of Tumblr, which will have an independent management, the statement said Yahoo: “The product, service and brand will continue to be separately defined and developed with the same irreverence, intelligence and commitment to strengthen farmers [who has been the brand] of Tumblr. “

success that Tumblr has achieved among younger people is what attracts Yahoo, the Internet pioneer who dominated cyberspace long before the appearance of Google or Facebook. But that was back when browsing habits have evolved. Tumblr, with over 108 million blogs, returns to this veteran of the Internet is a possibility that long you’re forbidden: being fashionable. And it opens a new door: the social networks.

The aim of course is to increase traffic and challenge competition (Google and Facebook). “The combination Tumblr + Yahoo! should grow the audience of Yahoo! at 50% for more than one billion monthly visitors and increase traffic by 20%,” concludes the statement of the company.

coolness of Tumblr stumbles, however, in numbers. Despite its 134.2 million monthly unique visitors, Tumblr – which is free for all users – can not raise as much as spent. In 2012, the 13 million dollars that the team led by David Karp could not covered in advertising spending on the maintenance of the platform, which includes 178 employees across the globe (including Portugal).

First service after money
Several investors have poured money on Tumblr – about 125 million dollars. But the results are still below expectations. The $ 100 million that the company hoped to get into advertising in 2013 now seem a mirage. And there is another constraint: the scorn Karp advertising schemes by more aggressive.

popularize the service is a priority Karp. Making money comes later. It is a common strategy other start-ups the genus, such as Facebook or Instagram. These two last staged the last major acquisition in the industry with the giant social network led by Mark Zuckerberg to buy the popular photo application per billion (although most of this amount has been paid in shares).

Yahoo has a long history of acquisitions since it was founded in 1995. The most valuable place in 1999, in the vertigo of the “dot-com bubble”, when the company bought GeoCities for 3900 million dollars. The hosting platform of sites , widely used in the 1990s, turned out to be closed (except in Japan) in 2009, although it has become almost irrelevant long before that.

On Friday, the beginning of an end-to-week this became the most talked about topic in the industry, Techcrunch reported that the supply of 1100 million was considered “too low” by those responsible for Tumblr. And Bloomberg has even realize the rumor that the news of Monday could have to do with Flickr, that Yahoo owns since 2005. In fact, the conference scheduled for New York 17h (22h in Lisbon) is on Flickr. The acquisition of Tumblr was confirmed Monday morning.