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| June 24, 2017

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Yahoo acquires Tumblr for $1.1 billion

Yahoo acquires Tumblr for $1.1 billion
Charles Chong

Yahoo’s board of directors recently finalized a decision to acquire Tumblr for $1.1 billion in cash.  Speculations began about the possibility of an acquisition by Yahoo a mere two days before the decision was finalized, and it’s likely that Yahoo’s CEO Marissa Mayer will officially announce the acquisition alongside news about Flickr during a Yahoo product event in New York on May 20th.

Tumblr is a microblogging platform and social networking website that currently hosts over 108 million blogs with 50.8 billion posts in total.  In fact, 75.8 million new posts are made every day on Tumblr, and there is a total of 13 billion page views.  However, despite these numbers, Tumblr’s revenue was only $13 million this year with an operating cost far more than that.  Tumblr’s hopes were to increase the amount of revenue from advertising to $100 million by 2013, but now it would seem to be irrelevant.

Hopefully, Marissa Mayer knows what she’s doing.  Yahoo previously purchased Geocities (for those old enough to remember) for $3.7 billion back in 1999 when it was the third most visited site on the internet.  Now Geocities is no more – completely obliterated from the internet, and Yahoo did not see a single dollar from it.  Let’s hope Tumblr doesn’t become the modern-day Geocities.

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