The deal announced Monday (5/20) represents Mayer’s boldest move yet since she left the Google empire 10 months ago to lead Yahoo’s latest comeback attempt. It also marks Yahoo’s most expensive acquisition since the Sunnyvale, California, company bought online search engine Overture a decade ago for $1.3 billion in cash and stock.
While the move surpasses Facebook’s $1 billion buyout of Instagram last year, Marissa Mayer hopes to breathe new life into Yahoo with the Tumblr acquisition. Her seventh exchange has found her making an appeal to more young people. Mayer aims to make up for years of missing out on the revolutionary changes made in social networking and mobile devices.
Tumblr, started by 26-year-old David Karp, has 108 million blogs, with many highly active users and personalities.
“This is not an inexpensive acquisition, but they’re willing to pay to get back some of what they’ve lost,” Colin Gillis, an analyst at BGC Partners said. “They want to be hip.” Will her and Yahoo’s attempt to be “hip” be a hit? Analysts and investors are likely to question the move to buy a site that has struggled to generate revenues in the wake of mobile becoming the gateway to the web.
Tumblr’s staff, which is led by Karp, has yet to comment on whether there will be any staff shake-ups moving forward. But all of the site’s 175 New York City-based employees may move over to Yahoo by the end of the month if all goes well fro Ms. Mayer.
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