This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Yahoo! Posts Tumblr For $1.1B in Mobile Growth Bid

Stocks in this article: YHOO FB

NEW YORK ( TheDeal) -- Yahoo! (YHOO), the Sunnyvale, California-based Web company undergoing a broad strategy shift under new CEO Marissa Mayer, will acquire New York startup Tumblr for $1.1 billion in cash in an ongoing attempt to establish its presence on smartphones.


Tumblr reportedly took in $13 million in revenue in 2012, and so far into 2013 has fallen short on its revenue goals of $100 million. The company raised about $125 million from venture capital investors from 2007 to 2011.


"Tumblr brings 50 billion blog posts (and 75 million more arriving each day) to Yahoo!'s media network and search experiences," the companies said in a joint statement Monday, May 20.

Mayer's arrival at Yahoo! has come with a flurry of deals as the company has sought to reinvent itself and bolster its presence on mobile devices.


Thus far among 2013's acquisitions for Yahoo! are: Summly, a news application; Loki Studios, for mobile gaming; MileWise, an app for travelers; Astrid, a to-do list organizer; and GoPollGo, a social polling tool.

The latest social media deal is not unlike Facebook's (FB) $1 billion pre-initial public offering grab of nascent startup Instagram in 2012, which the social network bought in order to continue its trajectory onto smartphones after years of dominance on desktop hardware.


Still, Yahoo! has had difficulty absorbing some of its startups in the past. Perhaps its most notable deal that soured, from 1999, is a $3.6 billion buy of GeoCities, which it would shut down a decade later.

But sources said that under Mayer, the company's reputation has improved and Yahoo! has increasingly been seen as a viable Silicon Valley technology company on the rebound.

Yahoo! even seemed to acknowledge its rocky M&A past when, in its statement earlier Monday, it said: "Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO."

Karp is Tumblr's founder, who, as a teen and high school dropout, developed the company in 2007.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs