A report from the Wall Street Journal has reported Yahoo’s potential purchase of Tumblr for $1.1 billion earlier today. This was rumoured last week, and now reports have confirmed that Yahoo board is now hoping to acquire the blogging service for the massive $1.1 billion.
Tumblr will still run as a separate business and independent property, according to the Wall Street Journal sources. Yahoo’s CEO Marissa Mayor was reporedly interested in the service, as she saw purchasing Tumblr would be be a way to big inroads into social media and boost revenue growth. If this is approved, investors would benefit greatly.
If Yahoo were to acquire Tumblr, I would see this as a great benefit for the company. Tumblr has established itself as a popular blogging platform with a massive audience. It would attract a demographic that Yahoo has not been able to achieve. But it seems that Yahoo now is trying to grab a piece of the pie in the media-based social networking world.
The report is surprising, as Tumblr only made revenue of $13 million last year. The purchase was rumoured to be $1 billion at first, but it seems to have increased. Other reports also suggested that Tumblr executives saw the price as too low, and may reject the offer. Tumblr fans, keep in mind that this is not confirmed yet. But the deal has raised eyebrows for some, as Yahoo reportedly made only $1.2 billion in cash in the latest quarterly earnings.
There is a Yahoo press conference planned in New York on Monday, so there may be more explanation on the potential acquiring of this service.