NEW YORK ( TheStreet) - After much speculation, Yahoo! ( YHOO) has confirmed that it is buying Tumblr, a popular microblogging platform and social media Website. According to the early morning press release the total cost of the deal is approximately $1.1 billion, substantially all of which is payable in cash.
Yahoo! is up 0.11% to $26.55 in pre-market trading. "Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business," said Yahoo!, in its press release. "The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators." Tumblr's offices in midtown Manhattan will remain and David Karp will continue as CEO.
For Yahoo!, considered "old media" in Web years, the deal offers a huge and much younger new audience. According to current stats, Tumblr sees 900 posts per second and 24 billion minutes spent on site each month. On mobile, more than half of Tumblr's users are using the mobile app for an average of 7 sessions per day.
In addition to the cash infusion, Tumblr will be able to take advantage of Yahoo!'s personalization technology and search infrastructure. The two companies will also work together to create advertising opportunities. The transaction is set to close in the second half of the year. We are likely to get more details about the deal at the big event that Yahoo! has planned for late this afternoon in midtown Manhattan. --Written by Gary Krakow in New York. >To submit a news tip, send an email to: email@example.com.