Yahoo signs off on $1.1bn deal to buy Tumblr

YAHOO’S chief executive Marissa Mayer has made her biggest purchase to date, agreeing to buy the blogging website Tumblr in a deal worth around $1.1bn (£725m).

Tumblr, which was founded by New York entrepreneur David Karp when he was just 20, has grown to more than 100m blogs since its creation in 2007. The service allows bloggers to easily post pictures, short pieces of text, videos and other content, and has a roster of celebrity users including Beyonce, the pop singer, and Rupert Murdoch.

The startup has only modest ad revenues, but Yahoo’s acquisition follows a pattern of recent deals as Mayer aims to make the once-mighty web firm relevant again. The deal, which was not formally announced but was signed off by Yahoo’s board last night, follows the $30m Yahoo paid for Summly, the mobile app created by British teenager Nick D’Aloisio.

It is unclear whether Yahoo will use its expertise selling advertising to make Tumblr profitable, or use Tumblr’s technology to drive more people to Yahoo’s services, but Mayer will make her plans clearer when she announces the deal today.

Tumblr is owned by a number of Silicon Valley investors, although Karp retains a sizeable stake.