Yahoo In Talks With Tumblr About Buyout

Lee Rannals for redOrbit.com – Your Universe Online

According to tech news website AllThingsD, Yahoo is in talks with blog site Tumblr regarding a possible takeover.

AllThingsD said talks with Yahoo and Tumblr are in the “serious” stage, and a later report by AdWeek mentioned the figure for the buyout could be $1 billion.

Yahoo is struggling to try and stay in business against Internet giant Google, despite being one of the first search engines. Marissa Meyer, the chief executive of Yahoo, has been trying to keep the company afloat after a multi-year decline in revenue and user engagement on its website. The deal with Tumblr could be just the thing to boost the company’s earnings.

“Yahoo needs to grow and better engage its audience, and Tumblr would find itself in possession of a key new weapon: the Yahoo homepage, not to mention the massive scale of Yahoo’s various digital media properties,” AllThingsD reported. “Needless to say, the Tumblr demographic skews young and likely mobile, which is the product category that Yahoo has itself trained its sites on; Yahoo has expressly stated that it is working to become a mobile-first, or at least focused company.”

Tumblr was founded in February 2007 and has 175 employees in offices across the country. It hosts nearly 108 million blogs, over 50 billion posts, and 70.6 million daily posts. Last November, Tumblr was ranked as the ninth most popular Web site in the US, with more than 61.3 million monthly US visitors and 170 million monthly visitors around the world. According to Forbes.com, the company made $13 million in 2012 and is looking to bring in about $100 million due to new advertising initiatives.

Yahoo’s chief financial officer Ken Goldman said earlier this week at a financial conference in Boston that one of the company’s biggest challenges is having an aging demographic.

“Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years,” Goldman said, according to CNET.

Adding Tumblr to Yahoo’s repertoire could be just the thing to help the company seem a little more hip.