Yahoo's board of directors has approved a possible deal to acquire Tumblr for $1.1 billion in cash. The widely-rumored deal isn't official, but with this approval it has certainly taken one step closer to becoming a reality.
Rumors have been swirling recently about Yahoo wanting to acquire Tumblr, and it seems like today they’ve made a lot of headway in getting the deal done. All Things D initially broke the news that Yahoo’s board was going to have a meeting today to discuss the possible acquisition of Tumblr, and now they are reporting that Yahoo’s board of directors has gone and approved the rumored purchase of Tumblr in what would be a staggering $1.1 billion deal, all of it being in cash.
The move gives both parties involved something they want. Yahoo instantly receives a lot of younger users which is a key demographic they’ve been chasing, and Tumblr investors receive a notable amount of cash. Yahoo has been struggling to stay relevant and has been losing quite a bit of mindshare to the competition due to the stigma of being an old fossil, and really not offering anything better than the competition. This deal would immediately change this, and also give Yahoo a significant mobile presence, an area Tumblr has been making quite a bit of headway in.
Amidst news of a possible deal there seems to be a growing concern among Tumblr users that Yahoo will take over and begin to change what they’ve already become accustomed to. However, it remains in Yahoo’s best interest to not only keep the Tumblr brand alive, but to allow it to operate the way it has, which has allowed it to earn million visitors in the last month alone. With that said, only time will tell what Yahoo hopes to accomplish at the company, and there are some decisions to be made regarding advertising and a perceived porn problem on Tumblr.
Of course, it should be noted that the deal hasn’t gone through; all this report is saying is that Yahoo is primed and ready to make the move now that the board has approved it. Barring something unforeseen, it shouldn’t be long now before the acquisition actually takes place and becomes official.
Marissa Mayer, the CEO of Yahoo, has made quite a few moves since taking the job, but this would definitely be her most significant deal, and one that could help define her tenure as CEO of Yahoo.
Source: All Things D