Yahoo has agreed to pay $1.1 billion for Tumblr, a six-year-old company with more than 100 million users but very little revenue, a deal that highlights the shifting balance of power in the technology business, The Wall Street Journal reports.
Yahoo's board has approved the all-cash deal to buy Tumblr, the Journal quoted people familiar with the matter as saying Sunday, May 19. Tumblr's board also has approved the deal, one of the people said. A deal could be announced as soon as Monday, the person said.
Yahoo Chief Executive Marissa Mayer's deal for Tumblr would give Yahoo, one of the original big Internet companies, a fast-growing Web service that could fill one of its many holes—namely, the lack of a thriving social-networking and communications hub. Tumblr is popular with many younger adults, in contrast with Yahoo's older customer base. Tumblr is also growing more quickly on smartphones than Yahoo.
Yahoo would be paying a premium for the company. When Tumblr last raised money, in late 2011, the $85 million venture-capital investment it received valued the company at $800 million.
New York-based Tumblr, founded in 2007, has 175 employees, more than 108 million blogs and, according to comScore, had nearly 117 million unique users world-wide in March. That is up from around 58 million a year ago. The site is among a number of fast-growing startups, including online scrapbook Pinterest and news aggregation site Reddit.
