Mayer and Karp after a news conference in New York.
Yahoo buys Tumblr in $1.1bn deal
New York, May 21, 2013
Yahoo has announced a $1.1 billion deal to buy blogging site Tumblr. The deal, which had been rumored since last Thursday, will help Yahoo to tap into the younger, active online user base at Tumblr.
The microblogging site — which allows users to quickly post pictures, text and video — has surged to more than 100 million users, who upload 90 million posts per day.
But the deal raises concerns among some Tumblr fans that the site could end up being cluttered by the ads that bring in billions of dollars a year to Yahoo. Tumblr CEO and founder David Karp has resisted the use of traditional display advertising on Tumblr to this point.
Yahoo said Tumblr will be independently operated as a separate business with Karp staying on as CEO.
Yahoo CEO Marissa Mayer posted her own Tumblr post to try to assure fans of the site they need not panic. In a call with investors and analysts, Mayer referred to the deal as a "game changer" for Yahoo. She said there will be no Yahoo branding on Tumblr.
The deal is bound to make boatloads of dough for the 26-year-old Tumblr founder, a native New Yorker and high school dropout. It will cement his place among the growing pantheon of celebrated tech entrepreneurs, like Facebook CEO Mark Zuckerberg.
Karp, who grew up on the upper West Side, began noodling with computer code when he was 11 and launched his own consulting business soon thereafter.
The boy wonder spent only one year at the prestigious Bronx High School of Science and thumbed his nose at attending college.
After bouncing around Japan, Karp began tinkering with Tumblr inside his mother’s tiny apartment in 2007. His office has since moved to the Flatiron District.
Karp, an avid Vespa rider, nested with his girlfriend Rachel Eakley, a grad student and chef, in a modest West Village apartment until last year. But he now lives in a luxury $1.6 million loft in Williamsburg, Brooklyn.