'We won't screw it up': Yahoo buys New York-based social network Tumblr for $1.1bn as chief executive Marissa Mayer rules out radical changes following negative reaction
Deal for £723m in cash justified by Tumblr’s impressive numbers as one of the world’s fastest growing social-media networks
Monday 20 May 2013
Yahoo today made its acquisition of Tumblr. official with a first post on the blogging-platform titled “Tumblr. + Yahoo! = !!”.
The statement from Yahoo CEO Marissa Mayer begins with a promise “not to screw it up”, whilst assuring users that David Karp will remain CEO and that Yahoo! will “operate Tumblr independently”.
The deal went through for $1.1 billion (£723 million) in cash, a sum justified by Tumblr’s impressive numbers as one of the world’s fastest growing social-media networks.
The platform has more than 300 million unique monthly visitors, with over 108 million blogs posting around 900 times a second.
Yahoo’s press-release also stressed Tumblr’s impressive mobile traffic, noting that more than half of the users use the platform’s smartphone app.
Mayer piled on the compliments for the Tumblr team and for Karp personally, aiming to play down Yahoo!’s corporate image saying: “I’ve long held the view that in all things art and design, you can feel the spirit and demeanor of those who create them. That’s why it was no surprise to me that David Karp is one of the nicest, most empathetic people I’ve ever met.”
On Tumblr’s staff blog Karp described himself as “elated” about the acquisition and aimed to “allay concerns”, stressing that “We’re not turning purple” and that the site’s mission – “to empower creators to make their best work and get it in front of an audience” – will remain central.
Karp described Yahoo as “the original Internet company” with the resources to help Tumblr get “better faster”. The deal will certainly add to Karp’s personal resources, with his 25% share of the company netting him $275 million .
The deal makes New Yorker David Karp - who attended high school for only a year - the latest internet whizkid to scoop an astronomical windfall from a web start-up.
Best known for its clean, simplistic design, Tumblr today claims to host more than 108 million blogs, with over 50 billion posts.
Its roster of celebrity users features pop singer Beyonce and media mogul Rupert Murdoch.
The reaction from Tumblr users to the sale of the site has been mixed so far, with many bloggers predicting that Yahoo!'s influence will sink the platform.
User msmayachu typified the site's reaction with a post this morning stating - "I LOVED TUMBLR AND YOU’RE TAKING IT AWAY FROM EVERYONE I’VE BEEN CRYING FOR THE PAST TWO HOURS I THINK I’M GOING TO DIE. YOU MOTHER TRUCKERS. YOU’RE GONNA PUT ADS IN AND BAN NSFW STUFF.”
msmayachu's response may seem disproportionate, but it is certainly heartfelt, and the grievances raised are quite pertinent.
Tumblr is notorious for its hands-off approach to content and a significant portion of its traffic is dedicated to pornography; companies are loath to let their advertisements appear in such a context.
The negative reaction also stems from historical comparisons with Yahoo!'s acquisition of GeoCities in 1999.
Like Tumblr, GeoCities was a hugely successful platform that offered internet-users a space for self-expression, allowing them to share content of all stripes. Like Tumblr the company was bought in a blaze of publicity (the final price was $3.1 billion in stocks) but users were unhappy with Yahoo!'s management, and GeoCities shut down for good in 2009.
However, the comparisons may not be helpful, and many commentators have been keen to highlight the differences between the two platforms.
Fred Wilson, a venture capitalist who invested in both GeoCities and Tumblr, spoke out at Ad Tech New York last Wednesday to explain Tumblr's superiority, citing the site's "elegant" business model and its use of a feed for its homepage. Wilson, like Karp, has great hopes for the site and for its integration of flexible "native" advertising.
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