We’re about to see a power shift online once again as Yahoo makes an offer to buy Tumblr. Yahoo’s board of directors agreed to make the deal today.
If the purchase goes through, Tumblr will still operate as an independent business.
By acquiring Tumblr, Yahoo would instantly gain a social-media website that has become a hub of communication and blogging for millions of people. Yahoo could help Tumblr generate more revenue from advertisements.
Yahoo Chief Executive Marissa Mayer became interested in the blogging site a couple of months ago, one of the people familiar with the matter said. The company considers the takeover to be a way to jump-start its revenue growth and obtain a bigger presence in social media tied to digital devices, according to this person.
Acquisitions have long been expected to be part of Ms. Mayer’s strategy, though to date she only has acquired small companies for their engineering and product-management talent.
Yahoo recently pulled out of a roughly $200 million deal to buy a controlling interest in the video website Dailymotion, owned by France Télécom SA, FTE.FR +0.23% before the French government prevented the deal, people familiar with the matter have said.
On Monday, Yahoo will also deliver an update about its Flickr photo-sharing unit, a person familiar with matter said.
SOURCE: WSJ
