Internet company Yahoo! Inc. (YHOO) and social media network Tumblr have reached a definitive agreement for Yahoo! to acquire Tumblr. Total consideration is about $1.1 billion, substantially all of which is payable in cash.
In a statement on Monday, Yahoo! said New York City-based Tumblr would be independently operated as a separate business as per ''the agreement and our promise not to screw it up''. The transaction is expected to close in the second half of the year.
David Karp, who founded the company in 2007, will continue as CEO of Tumblr. According to the statement, the product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators.
Yahoo! CEO Marissa Mayer said, "On many levels, Tumblr and Yahoo! couldn't be more different, but, at the same time, they couldn't be more complementary. Yahoo! is the Internet's original media network. Tumblr is the Internet's fastest-growing media frenzy...And, fundamentally, Tumblr and Yahoo! are both all about users, design, and finding surprise and inspiration amidst the everyday."
Tumblr has over 300 million monthly unique visitors and 120,000 signups every day. It 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 and do an average of 7 sessions per day.
Yahoo! said Tumblr's popularity and engagement among creators, curators and audiences of all ages brings a significant new community of users to the Yahoo! network. The combination is expected to grow Yahoo!'s audience by 50 percent to more than one billion monthly visitors, and to increase traffic by around 20 percent.
The deal benefits both companies. Tumblr can deploy Yahoo!'s personalization technology and search infrastructure to help its users discover creators, bloggers, and content. For Yahoo!, Tumblr brings 50 billion blog posts to its media network and search experiences. The two firms will also work together to create advertising opportunities.
YHOO, which closed at $26.52 on Friday, is losing 1.3 percent in pre-market activity.
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