Yahoo to buy Tumblr

Rappler.com

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The Wall Street Journal reports internet firm Yahoo! is set to buy popular blogging platform Tumblr for $1.1 billion in cash. If confirmed, the deal would be the largest for the company since Marissa Mayer took over as chief executive last year and could help the struggling Internet pioneer capture younger audiences. The WSJ says Yahoo’s board unanimously approved the deal, which may be announced Monday in New York. While the popular blogging site generates little cash, its inclusion in the Yahoo! family could open new advertising and other revenue sources.
Douglas McIntyre, analyst at 24/7 Wall Street, says the deal “looks too rich” for a company that generates only $15 million in annual revenues.
He adds, “If Yahoo! cannot significantly lift Tumblr sales, the deal will be a bust.” 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. Online data group Survata reports Tumblr is more popular than Facebook among those aged 13 to 25.


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