And Yumblr is born: Yahoo buys Tumblr for $1.1 billion [Updated]

yumblr lomoRumors that surfaced at the end of last week appear to have been confirmed, as the Wall Street Journal reports that Yahoo has acquired popular blogging-meets-social platform Tumblr for $1.1 billion – slightly more than Facebook’s acquisition of Instagram for $1 billion last spring. Yahoo is expected to announce the deal Monday afternoon in New York City.

Yahoo has been on a tear acquiring young startups since restructuring under new CEO Marissa Mayer, but the Tumblr buy out is easily the largest profile purchase it’s made, as well as the most mature technology and team it has added to its portfolio. The impetus behind the deal seems pretty forthright: Yahoo wants to look like a hipper, more agile, more mobile, social-friendly brand, and Tumblr has been actively seeking a way to monetize the platform that introduced us to the art of reblogging.

While the deal appears set in stone, many questions remain – namely, what exactly Yahoo plans to do with Tumblr. Will it harvest the executives and subsume the technology? That scenario is seems unlikely, given Tumblr’s incredibly loyal and active userbase, but Yahoo’s track record with acquisitions can be fairly described as uneven.

We will update this report as details about the deal continue to surface.

Update 05/20/13 10 a.m. EST

Marissa Mayer has officially confirmed today that Tumblr is in fact being acquired by Yahoo for the price of $1.1 billion.

Despite speculation that Tumblr’s team could be taken apart and absorbed by Yahoo, Tumblr CEO David Karp assures users that the micro-blogging site will remain the same Tumblr many have come to love. “We’re not turning purple. Our headquarters isn’t moving. Our team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn’t changing,” Karp writes in a blog post.

Mayer is a bit more frank, noting that the team will “promise not to screw it up.” It’s reassuring to users that were protesting and glum about the future of Tumblr, threatening an exodus. “We will operate Tumblr independently. David Karp will remain CEO,” Mayer adds.

The difference you’ll notice is that Tumblr will have far more resources to pull from, meaning the blogging service will be better and faster, says Karp. Mayer, on the other hand, gets into the details, which circle around the inevitable advertising union both platforms can gain from the other.

“In terms of working together, Tumblr can deploy Yahoo’s personalization technology and search infrastructure to help its users discover creators, bloggers, and content they’ll love,” Mayer says. “In turn, Tumblr brings 50 billion blog posts (and 75 million more arriving each day) to Yahoo’s media network and search experiences. The two companies will also work together to create advertising opportunities that are seamless and enhance user experience.”

If you’re still wondering what Yahoo has to gain from the acquisition, Mayer paints a picture as clear as day.

“The combination of Tumblr+Yahoo could grow Yahoo’s audience by 50 percent to more than a billion monthly visitors, and could grow traffic by approximately 20 percent,” she estimates. Tumblr reportedly has 300 million users and 120,000 new daily sign-ups, with 50 percent of Tumblr users accessing the service via its mobile app on an average of seven times a day.

Based on earlier reports, the acquisition comes just in the nick of time for Tumblr. Despite rumors that Yahoo’s $1.1 billion asking price was too low – considering that Facebook and Microsoft were possibly in line – TechCrunch suggested that Tumblr had just “a few months of cash runway left.” Not surprisingly, seeing as how Tumblr was edging out just $13 million in revenue last year despite a $800 million valuation, the company was on the verge of running out of capital.

Additional reporting by Francis Bea

Social Media

Dine and dash(board): Make a Yelp reservation from your car’s control panel

Already in the car, but can't decide where to eat? Yelp Reservations can now be added to some dashboard touchscreens. Yelp Reservations searches for restaurants within 25 miles of the vehicle's location.
Digital Trends Live

Indiegogo’s CEO on how crowdfunding is going beyond fundraising

David Mandelbrot, CEO of Indiegogo, joins us on DT Daily to talk about how Indiegogo is changing its crowdfunding business to offer support and resources, which in turn would lead to more successful campaigns.
Music

Here's our head-to-head comparison of Pandora and Spotify

Which music streaming platform is best for you? We pit Spotify versus Pandora, two mighty streaming services with on-demand music and massive catalogs, comparing every facet of the two services to help you decide which is best.
Cars

From Rolls-Royce to Lamborghini, these are the most expensive cars in the world

If you recently discovered an oil reserve in your backyard, you probably have some extra cash to spend. Look no further, because we’ve rounded up the most expensive cars in the world.
Mobile

The 100 best Android apps turn your phone into a jack-of-all-trades

Choosing which apps to download is tricky, especially given how enormous and cluttered the Google Play Store has become. We rounded up 100 of the best Android apps and divided them neatly, with each suited for a different occasion.
Computing

Hackers sold 120 million private Facebook messages, report says

Up to 120 million private Facebook messages were being sold online by hackers this fall. The breach was first discovered in September and the messages were obtained through unnamed rogue browser extensions. 
Social Media

Facebook opens pop-up stores at Macy’s, but they’re not selling the Portal

Facebook has opened pop-up stores at multiple Macy's, though they're not selling Facebook's new Portal device. Instead, they're showcasing small businesses and brands that are already popular on Facebook and Instagram.
Web

Switch up your Reddit routine with these interesting, inspiring, and zany subs

So you've just joined the wonderful world of Reddit and want to explore it. With so many subreddits, however, navigating the "front page of the internet" can be daunting. You're in luck -- we've gathered 23 of the best subreddits to help…
Social Media

Facebook Messenger will soon let you delete sent messages

A feature coming to Facebook Messenger will let you delete a message for up to 10 minutes after you send it. The company promised the feature months ago and this week said it really is on its way ... "soon."
Social Media

Pinterest brings followed content front and center with full-width Pin format

Want to see Pinterest recommendations, or just Pins from followed users? Now Pinners can choose with a Pinterest Following feed update. The secondary feed eliminates recommendation and is (almost) chronological.
Smart Home

Facebook's Alexa-enabled video-calling devices begin shipping

Facebook's Portal devices are video smart speakers with Alexa voice assistants built in that allow you to make calls. The 15-inch Portal+ model features a pivoting camera that follows you around the room as you speak.
Social Media

Vine fans, your favorite video-looping app is coming back as Byte

Vine fans were left disappointed in 2017 when its owner, Twitter, pulled the plug on the video-looping app. But now one of its co-founders has promised that a new version of the app, called Byte, is coming soon.
News

Social media use increases depression and anxiety, experiment shows

A study has shown for the first time a causal link between social media use and lower rates of well-being. Students who limited their social media usage to 30 minutes a day showed significant decreases in anxiety and fear of missing out.
Social Media

Twitter boss hints that an edit button for tweets may finally be on its way

Twitter has been talking for years about launching an edit button for tweets, but it still hasn't landed. This week, company boss Jack Dorsey addressed the matter again, describing a quick-edit button as "achievable."