Yahoo’s US $1.1 Billion deal for Tumblr approved by board (Update: done deal!)

Microblogging tool, Tumblr, will soon have new owners if a deal for a US $1.1 billion cash acquisition consummates. The deal was approved by the Yahoo board yesterday. Tumblr was founded in 2007 by now 26 year old entrepreneur, David Karp, who is also the current CEO. It is reported that the site’s popularity with young & hip is what attracted Yahoo’s new CEO Marissa Mayer to buy the company to, hopefully, revitalise Yahoo. Tumblr’s current valuation is $800 million and the company is reported so far to have raised $125 million in funding from US investors.

Some things to note about the deal:

• The service will remain independent in a way similar to Facebook’s Instagram
• David Karp will remain CEO for at least 4 years
• Tumblr already has an advert based model for business, they reportedly made $13 million in revenue last year, however,
• No one really knows how much of it there is on the service, but Tumblr has an adult content problem, which may be an issue in terms of ads and revenue
• How big is Tumblr itself? The company says it has 108 million blogs, 50.6 billion posts. Last month, according to audience measurement advertising company Quantcast, Tumblr did 12.1 billion pageviews!

A formal announcement of the acquisition is expected to be made today. You can read the full story here.

Update: It’s a done deal!

Source: AllThingdsD
Image via Marco Arment