Yahoo Closes Its $1.1 Billion Acquisition of Tumblr
Tumblr is a popular hub of user-generated content because users can simply sign up and start using it in minutes for free.Internet search and Web services pioneer Yahoo officially became a lot more relevant to Millennials and younger generations June 20 when it closed its $1.1 billion deal to acquire Tumblr. In Marissa Mayer's first major move as CEO, Sunnyvale, Calif.-based Yahoo had announced on May 20 the purchase of the New York-based blogging platform that provides an Internet home for about 108 million blogs. Tumblr is a popular hub of user-generated content because users can simply sign up and start using it in minutes for free. Users must be signed up to view other Tumblr blogs. It has attracted a generally young user base that employs the platform to post pictures and text on numerous topics, mostly involving music, art and culture.
Tumblr Profitability Not ExemplaryThe deal provides Yahoo with a highly trafficked—yet financially so-so—social media platform to reach new users. Tumblr sites don't include display advertising. However, as the first big acquisition move for Mayer's regime, it is clearly part of an overall strategy to bolster Yahoo's position in the young-professional consumer market.
Many of those blogs are, in fact, sites that serve up pornographic photos and videos, something that Yahoo may find problematic as time goes on.