Yahoo To Announce $1.1 Billion Acquisition Of Tumblr

One of the worst-kept corporate secrets in recent memory, Yahoo’s hope to buy blogging network Tumblr, appears to be made public and official sometime today. According to The Wall Street Journal, the Yahoo board met to approve a $1.1 billion offer to buy the company. As WSJ tech site All ThingsD had been reporting all last week, Yahoo CEO Marissa Mayer has been investigating this acquisition for over six months. She sees in it the possibility of Yahoo reaching a younger, hipper audience.

A Tumblr buy also positions Yahoo in several key trends of note. First, it is akin to visual social networks like Pinterest and Instagram, in that it emphasizes inspiring design and imagery over personal news, check-ins and updates. Yahoo does have a strong existing brand in the photo-sharing space, FlickR, that could be an interesting tie-in here.



The deal also gives Yahoo an interesting native ad format. Tumblr recently introduced in-stream ads that I find especially compelling because they mimic the creative aesthetic of the best Tumblr posts. Yahoo could use some new ad models. Its display advertising was off 11% in its most recent quarter compared to last year. Mayer blamed the decline principally on the shift to mobile where display advertising commands a lower CPM. Native ad formats that play and price well across platforms could be a help to the company.

Also significant is its mobile traction. About a quarter of Tumblr traffic already comes from mobile sources. Arguably, the site is more engaging on handsets than it is on a desktop browser. Its recently released iOS app, for instance, fills the screen with the posted imagery rather than requiring a click to enlarge the visuals.

And of course it gives Yahoo a social network, which currently it does not have beyond Flickr. At one time in the mid 2000s Yahoo actually tried to lead the way in socially fueled search and Q&A formats as alternatives to search. Like many Yahoo strategies, this was abandoned as new leadership took it in other directions, at least until the next ouster.

According to All Things D, the deal hammered out with Tumblr would leave founder and CEO David Karp in place and the brand intact. Let's hope so. Rather than do what Yahoo traditionally has done with its properties -- clutter and choke them mercilessly with cross-promotions and Y! branding -- the company might want to pepper some of its other properties with some of Tumblr’s own good examples of genuinely engaging content and advertising. 

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