Yahoo! In Talks To Buy Tumblr For $1.1 Billion Cash

Yahoo! In Talks To Buy Tumblr For $1.1 Billion Cash

All Things D is reporting the Yahoo! board of directors will meet Sunday to vote on an all-cash purchase of Tumblr for $1.1 billion.

Tumblr is popular with younger audiences and Yahoo! CEO Marissa Mayer wants to attract that audience into the Yahoo! tent since younger audiences are valued by advertisers. Comscore estimates that Tumblr had 117 million visitors in April.

The deal isn’t done, but there is an agreement in place contingent upon board approval. If the deal goes through Tumblr CEO David Karp will remain in charge and Tumblr will operate with a degree of autonomy much like Flickr has.

Forbes reported that Microsoft and Facebook are also extremely interested in a Tumblr acquisition, but confirmed the lockup negotiation with Yahoo!

Like Facebook and Twitter, Tumblr avoided advertising in it’s formative years. David Karp has recently given several interviews indicating Tumblr interest in attracting advertising that is different.

Karp is interested in designing a new type of digital advertising that creates an emotional connection between consumers and brands. Tumblr’s initial experiments with monetization have focused on native ad products that allow brands to promote content with the possibility of reaching up to $120 million impressions per day.

Last September Tumblr hired Groupon’s Lee Brown as head ad salesman. Brown has 10 years experience selling ads for Yahoo! before he took the job with Groupon.

Yahoo! has a press event scheduled for Monday with Marissa Mayer listed as speaker. Bloomberg says Mayer will be announcing an update to Flickr, but if the Yahoo! Tumblr buy is approved, it will be bigger news than whatever is new at Flickr.

UPDATE: A Tumblr source tells Techcrunch that Tumblr may reject Yahoo’s $1.1 billion offer for being too low despite it being higher than Tumblr’s $800 million valuation.

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