ref="http://www.cityam.com/company/yahoo">YAHOO has confirmed the $1.1bn (£722m) purchase of the social blogging website Tumblr, with chief executive Marissa Mayer pledging not to “screw it up”.
Having signed off on the deal on Sunday night, Mayer yesterday announced the acquisition – the biggest since she joined Yahoo last summer – and said she would not tamper with the 110m blogs that Tumblr houses.
On her personal Tumblr page, Mayer wrote: “We promise not to screw it up. Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently.” She added that the website’s 26-year-old founder David Karp, who is expected to make more than $200m from the sale, will remain Tumblr’s chief executive.
News of Yahoo’s acquisition had spooked many of Tumblr’s 300m users, who had feared that the web giant would cover its new purchase with adverts as well as censoring the service.
Tumblr has become wildly popular as an easy way to post pictures, videos and snippets of text on a personal blog, but has modest revenues. Yesterday, Mayer said Yahoo would explore advertising opportunities for Tumblr, although the acquisition was also seen as a radical attempt to make Yahoo relevant again.
The firm, which was dominant at the height of the dotcom boom, went through a turbulent period before Mayer’s appointment, but since then the company’s stock has almost doubled in value.
PROFILE: THE 26-YEAR-OLD SOCIAL PRODIGY
IN A similar way to Facebook boss Mark Zuckerberg, another 20-something who has developed his bedroom brainwave into a social media behemoth, David Karp’s rise to the top barely appears to have affected how he acts, dresses or presents himself.
Rarely seen out of a hoodie and sporting a crop of floppy hair, Karp still looks every inch the 20-year-old he was when he launched Tumblr six years ago, and though he stands to earn upwards of $200m (£131m) from selling the company, he has by no means been looking for a quick buck, having rebuffed several offers for Tumblr over the years. After dropping out of school at 15, by which time he was already building websites, Karp impressed entrepreneur John Maloney so much that he was given a senior role at Maloney’s internet parenting forum UrbanBaby at just 16. When the firm was sold in 2006, Karp used the cash from his stake to set up a short-lived consultancy, before creating Tumblr in February 2007 from his bedroom in his mother’s New York apartment. As the service rapidly grew to its current base of more than 100m blog accounts, it attracted plenty of attention, although Karp resisted calls to sell out, claiming “we would really rather not be gobbled up by a big media company” in 2008. He has also criticised the traditional internet display adverts that companies including Yahoo rely on, claiming it “turns our stomachs” in 2010. It is not clear what might have changed in Karp’s mind to encourage him to join Yahoo, although assurances that he will retain control of Tumblr’s day-to-day operations are likely to have come into it. “We’re not turning purple. Our headquarters isn’t moving. Our team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn’t changing,” Karp told staff yesterday.