Yahoo! Acquires Tumblr for $1.1B

Last week, website brand Yahoo Inc. announced that it was acquiring Tumblr, the popular social media platform, for an upfront sum of $1.1 billion.

The move came as an effort for the aging brand to evade total irrelevance after it has long suffered in light of fierce competition from other search engines and email servers — like the predominant Google. The announcement also fell just a few months after Hotmail, a comparable brand from the early days of the Internet, released a statement that it would be closing for good following a phase-out. (Hotmail users will be redirected/upgraded to Outlook email services.)

With Tumblr, Yahoo! hopes to target a much younger demographic and foray further into social networking. In an interesting move, Yahoo! presumed that the younger audience of the microblogging site would worry about being stifled and said that it would not “screw it up” for those existing users.

The move doesn’t just benefit Tumblr, however. While Yahoo! gains a fresh and more relevant clientele (along with hundreds of thousands of new users and a new revenue stream), Tumblr benefits from Yahoo Inc.’s well-honed search algorithms and analytics, which will help classify, organize and disseminate the microblog content.

Only time will tell how both brands will cooperate and reap the rewards of the buyout, however. For now, the companies have stated that they will remain separate entities and operate independently in business.

Recent Posts