Tech giant Yahoo! is reportedly expanding its empire, acquiring blogging site Tumblr in a $1.1 billion, all-cash deal.
The purchase could be announced Monday, the tech website All Things D reported.
Marissa Mayer, CEO of Yahoo!, has a press event set for Monday in New York.
The acquisition is the biggest for the company since CEO Marissa Mayer took the helm at Yahoo! nearly one year ago. Tumblr is a site that hosts 108 million blogs and more than 51 billion posts and is popular among a younger demographic, a segment where Yahoo is looking to gain a foothold, sources told All Things D.
Mayer apparently thinks the purchase will be “the stake in the ground of what her strategy is going forward for Yahoo!,” the source said.
Time Warner Cable Media President Joan Gilman and Tumblr founder David Karp. Karp must remain at Yahoo! for at least four years under the deal.
Mayer has a scheduled press event Monday in New York, the home of Tumblr.
Tumblr’s founder and CEO David Karp is expected to mostly maintain control at the company and is required by contract to stay at Yahoo! for at least four years.
Tumblr is valued at $800 million, and experts predict it could make much more money with a different advertising model.
The 26-year-old high school dropout will make boatloads of cash from the deal.
Created in 2007, Tumblr is valued at $800 million and had 117 million visitors to the site last month. Experts predict the site could make much more money with a different advertising model, which Yahoo! is sure to influence.
Yahoo! reportedly wants Tumblr to help the struggling company attract a younger demographic.
Yahoo!’s chief financial officer, Ken Goldman, referenced a purchase or change at the company that would target the younger generation last week at a tech conference .
“One of our challenges is we have had an aging demographic,” Goldman said at the Boston event. “Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.”
Source NYD
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