Yahoo! Inc.’s board has reportedly approved Yahoo! to buy Tumblr for $1.1 billion cash. The agreement will include a provision that Tumblr will continue to operate independently of Yahoo!.
Marissa Mayer, Yahoo! Chief executive, hopes the acquisition will secure increased revenue, through the social networking market. As reported by The Wall Street Journal, details about the acquisition are expected to be announced tomorrow.
Tumblr allows users to post photos, text, quotes, links, music, and videos, from computers and mobile devices. As explained on Tumblr.com, the posts are fully customizable using preset themes or HTML.
David Karp, founder and CEO, created Tumblr in February 2007. The application is available in 12 different languages. In the last six years, over 50 billion posts and over 100 million blogs have been created using Tumbler. They currently have 175 employees.
Yahoo! was founded by Messers, Filo, and Yang. The three men dropped out of school and started the company with an initial investment of $2 million. “Yahoo” means, literally, “rude, unsophisticated, uncouth.”
As reported by The Wall Street Journal, MyYahoo was launched in 1996, allowing users to personalize their homepage with information including weather reports, stock quotes, local news, and horoscopes.
Yahoo! had a good start into the industry. However, by 2012, under the direction of CEO Scott Thompson, Yahoo! was forced to cut close to 2,000 jobs. Thompson eventually resigned over accusations that he falsified information about his background, including his computer science degree.
In July of 2012, Marissa Mayer was named as Thompson’s replacement. Mayer’s strategy for revitalization includes Yahoo! buying Tumblr for $1.1 billion cash.
Over the last year she has sanctioned the purchase of several smaller companies, but the purchase of Tumblr will be the largest acquisition under her direction. Yahoo! executives reportedly expect the purchase to “jump-start its revenue growth and obtain a bigger presence in social media tied to digital devices.”
Reports that Yahoo! will buy Tumblr for $1.1 billion are expected to be confirmed and further detailed in an announcement tomorrow.
[Image via Flickr]