Internet giant Yahoo! Inc. (YHOO) is close to announcing a deal to acquire micro-blogging and social-networking site Tumblr, Inc. in an all-cash deal valued at about $1.1. billion, according to media reports on Sunday. The proposed deal has reportedly been unanimously approved by the Yahoo board on Sunday.
Sunnyvale, California-based Yahoo could announce the deal as early as Monday at its press conference scheduled by Yahoo CEO Marissa Mayer that is said to have been called to unveil updates to its Flickr photo-sharing site. The press invite for the event reportedly said she has to 'share something special.'
The offer price represent a significant premium over Tumblr's $800 million valuation that was reached at when it last raised $85 million in funding from private investors led by Greylock Partners and Insight Venture Partners in August 2011.
The proposed deal will boost Yahoo's ability to attract younger audiences as it battles with Internet rivals Facebook, Inc. (FB) and Google, Inc. (GOOG) to gain larger social media presence. The service is most popular with the teen and college-aged user segments with half of Tumblr's visitor base being under the age of 25.
According to reports, Facebook and Microsoft Corp. (MSFT) were also interested in acquiring New York-based Tumblr, but Yahoo was having a lock-up agreement with Tumblr that prevented it from holding a bidding war for the right to buy it. Yahoo was the first to offer a firm deal after Tumblr had put itself up on the block a few months ago.
Founded in February 2007 by its CEO David Karp, Tumblr employs 175 people and currently hosts 108.5 million blogs, with a total of 50.9 billion posts at 82.1 million daily posts. It has a significant presence on mobile devices.
However, Tumblr has been unsuccessful in generating enough revenues to keep the company running, and recently revealed to its employees that it only had enough cash to keep it running for another few months as costs have exceed revenues.
Tumblr lets you effortlessly share anything. The microblogging site allows users to post text, photos, quotes, links, music, and videos from their browser, phone, desktop, email or wherever they happen to be.
Following the closure of the deal, Tumblr is expected to continue to operate as an independent business, with Karp continuing to run the company he founded.
The proposed deal could be the largest since Mayer took over the helm of Yahoo in July 2012. She has already recently made a number of small acquisitions of apps and mobile startups such as Summly, Astrid, GoPollGo, MileWise, Loki Studios. However, she failed in her attempt to acquire a controlling stake in French video site Dailymotion, owned by France Télécom SA.
YHOO closed Friday's regular trading session at $26.52, down $0.06 or 0.23% on a volume of 04.89 million shares. In the past 52-week period, the stock has been trading in a range of $14.59 to $27.68.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.