Yahoo buying Tumblr for $1.1 billion, vows not to screw it up

Started by garbon, May 20, 2013, 08:58:25 AM

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garbon

May 20, 2013, 08:58:25 AM
http://news.yahoo.com/yahoos-board-approves-1-1-billion-tumblr-acquisition-103611211.html

QuoteYahoo Inc said it is acquiring blogging service Tumblr for $1.1 billion cash, a bold bet by Chief Executive Marissa Mayer to revitalize the struggling Internet pioneer by co-opting a Web property with strong visitor traffic but little revenue.

The deal, which will use about a fifth of Yahoo's $5.4 billion in cash and marketable securities, is the largest by far since Mayer took the reins in July seeking to reverse a multi-year decline in Yahoo's business and Web traffic.

"Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business," Yahoo said in a statement on Monday.

Tumblr is one of the Web's most popular hubs of so-called user-generated content. The deal will provide Yahoo with a much-needed platform in social media to reach a younger generation of users less tied to Yahoo's traditional Web portal and email services.

Analysts, contacted after the deal was reported on Sunday by the online publication All Things D, said Yahoo was paying a hefty premium. Media reports have pegged Tumblr's 2012 revenue at $13 million. The privately held company, based in Manhattan, does not disclose its financial results.

"Even if revenue was $100 million, it means Yahoo paid 10 times revenue," said BGC Financial analyst Colin Gillis. "Ten times is what you pay to date the belle of the ball. It's on the outer bands of M&A."

Yahoo could quickly boost Tumblr's revenue by combining the website with its own sales force, said Pivotal Research Group analyst Brian Wieser. But loading Tumblr up with banner ads risks alienating its users and probably wouldn't provide a significant lift to Yahoo's overall revenue, he said.

"It's not clear that this deal will be favorable from a return-on-capital perspective," Wieser said. "One billion (dollars) for one company is a big bet."

Shares of Yahoo fell 1.4 percent in premarket trade. They closed on Friday at $26.52.

Yahoo remains one of the Web's most popular destinations, with hundreds of millions of monthly users, but the company has seen its revenue shrink in recent years as consumers and advertisers favor rivals such as Google Inc and Facebook Inc.

Yahoo said the acquisition is expected to increase its audience by 50 percent to more than a billion monthly visitors.

David Karp, who founded Tumblr in 2007, will remain CEO.

Tumblr is worth 1.1 billion?
"I've never been quite sure what the point of a eunuch is, if truth be told. It seems to me they're only men with the useful bits cut off."
I drank because I wanted to drown my sorrows, but now the damned things have learned to swim.

HVC

#1
May 20, 2013, 09:02:39 AM
Quote from: garbon on May 20, 2013, 08:58:25 AM

Tumblr is worth 1.1 billion?
No, but people never learn.
Being lazy is bad; unless you still get what you want, then it's called "patience".
Hubris must be punished. Severely.

Valmy

#2
May 20, 2013, 09:07:01 AM
Quote from: garbon on May 20, 2013, 08:58:25 AM
Tumblr is worth 1.1 billion?

Of course not.  I do not know why people continue to pay so much for these big web brands above their revenue streams.  Like somehow just because they are famous and well known they will magically make money.  I swear it is like the Facebook and dot com busts never happened.
Quote"This is a Russian warship. I propose you lay down arms and surrender to avoid bloodshed & unnecessary victims. Otherwise, you'll be bombed."

Zmiinyi defenders: "Russian warship, go fuck yourself."

garbon

#3
May 20, 2013, 09:14:13 AM
Quote from: Valmy on May 20, 2013, 09:07:01 AM
I swear it is like the Facebook and dot com busts never happened.

Seriously, so odd but I guess congrats to tumblr's CEO.
"I've never been quite sure what the point of a eunuch is, if truth be told. It seems to me they're only men with the useful bits cut off."
I drank because I wanted to drown my sorrows, but now the damned things have learned to swim.

jimmy olsen

#4
May 20, 2013, 09:21:17 AM
If you have to vow not to screw it up, chances are you're going to screw it up.
It is far better for the truth to tear my flesh to pieces, then for my soul to wander through darkness in eternal damnation.

Jet: So what kind of woman is she? What's Julia like?
Faye: Ordinary. The kind of beautiful, dangerous ordinary that you just can't leave alone.
Jet: I see.
Faye: Like an angel from the underworld. Or a devil from Paradise.
--------------------------------------------
1 Karma Chameleon point

DGuller

#5
May 20, 2013, 10:32:40 AM
Good.  Marissa Mayer strikes me as a highly ruthless and unpleasant human being, even for a big shot CEO.  I can't stand people who absolutely have to institute a total institutional purge of everyone when they come in, simply for the sin of not being hired by them.  People like that deserve to fuck up publicly, and it looks like she put in her first bid.

CountDeMoney

#6
May 20, 2013, 10:39:35 AM
Quote from: DGuller on May 20, 2013, 10:32:40 AM
Good.  Marissa Mayer strikes me as a highly ruthless and unpleasant human being, even for a big shot CEO.  I can't stand people who absolutely have to institute a total institutional purge of everyone when they come in, simply for the sin of not being hired by them.  People like that deserve to fuck up publicly, and it looks like she put in her first bid.

Stop hating women in power.

MadImmortalMan

#7
May 20, 2013, 10:55:38 AM
She's just leaning in.
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers

Caliga

#8
May 20, 2013, 11:39:40 AM
Quote from: DGuller on May 20, 2013, 10:32:40 AM
Good.  Marissa Mayer strikes me as a highly ruthless and unpleasant human being, even for a big shot CEO.  I can't stand people who absolutely have to institute a total institutional purge of everyone when they come in, simply for the sin of not being hired by them.  People like that deserve to fuck up publicly, and it looks like she put in her first bid.
:huh:
0 Ed Anger Disapproval Points

DGuller

#9
May 20, 2013, 12:17:22 PM
Quote from: Caliga on May 20, 2013, 11:39:40 AM
Quote from: DGuller on May 20, 2013, 10:32:40 AM
Good.  Marissa Mayer strikes me as a highly ruthless and unpleasant human being, even for a big shot CEO.  I can't stand people who absolutely have to institute a total institutional purge of everyone when they come in, simply for the sin of not being hired by them.  People like that deserve to fuck up publicly, and it looks like she put in her first bid.
:huh:
:huh:

fhdz

#10
May 20, 2013, 12:20:35 PM
Guller's a Russian actuary; to say he's a misogynist is on the highest order of redundancy.
and the horse you rode in on

MadImmortalMan

#11
May 20, 2013, 12:40:29 PM
Gully didn't actually say anything about her being a woman. He said unpleasant human being.
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers

Valmy

#13
May 20, 2013, 12:48:57 PM
Quote"This is a Russian warship. I propose you lay down arms and surrender to avoid bloodshed & unnecessary victims. Otherwise, you'll be bombed."

Zmiinyi defenders: "Russian warship, go fuck yourself."

Caliga

#14
May 20, 2013, 12:51:32 PM
No, but seriously: I was just wondering where DG got this impression of Yahoo's CEO from.  I'm not saying he's wrong, just wondering how he came to those conclusions. :hmm:
0 Ed Anger Disapproval Points
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