updated 06:12 am EDT, Fri May 17, 2013
Offer for blogging platform claimed could top $1 billion
Yahoo is in discussions to acquire or work with blogging service Tumblr, according to reports. The talks between the two companies are, depending on the report, concerning a possible strategic alliance between the two or an outright purchase of Tumblr, with the search engine said to be offering as much as $1 billion.
Sources of All Things D and AdWeek confirm the talks as going on, and reveal that Tumblr has previously raised $125 million in funding and is valued at $800 million, making the $1 billion offer one with a significant premium. Tumblr is also said to have 117 million visitors for April alone, 107.8 million blogs, 50.6 billion posts, and is starting to generate revenues from a small amount of advertising located on the user dashboard pages. Revenues last year apparently reached $13 million, and is suggested to reach $100 million this year.
The motivation for Yahoo to perform some quick acquisitions, such as news reader app Summly and video chat startup OnTheAir, along with the company's pruning of depreciated services, is part of the company's attempts to reinvigorate the brand. Yahoo CFO Ken Goldman, attending the JP Morgan Global Technology Conference, said "One of our challenges is we have had an aging demographic. Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years."