UPDATE: Yahoo Board OKs $1.1B Deal To Acquire Tumblr — Analysis

UPDATE, 1:27 PM: Yahoo‘s spin machine will be hard at work today and tomorrow trying to persuade investors that CEO Marissa Mayer isn’t wildly overpaying for Tumblr. Although the social media service has become red hot — it averages about 75.8M posts a day — it generated just $12M in revenue last year and hopes for $100M this year, Forbes says. CEO David Karp began to sell ads for the site just a year ago. Yahoo has more than enough cash to make the deal. Still, Mayer could use Wall Street’s support for the biggest acquisition that she has made since taking charge in July. Her company’s shares have appreciated about 33% so far this year because Yahoo’s investments in Chinese e-commerce site Alibaba and Yahoo Japan have been doing so well. Sales of display ads, which have been key for Yahoo, continued to disappoint in Q1. Tumblr, whose average user is under 25, could help Yahoo make more connections with young Web users. But it also could complicate Yahoo’s sales message due to Tumblr’s comparatively lax views about hosting porn, BusinessWeek notes.

The talk about Tumblr could eclipse some additional news Yahoo plans to make tomorrow: It has scheduled a press conference to unveil updates to its Flickr photo-sharing service, Bloomberg reports.

UPDATE 10:55 AM: Yahoo board has greenlighted buying the social network in a billion-dollar-plus deal that could be announced as early as tomorrow (more…)

This article was printed from https://deadline.com/2013/05/yahoo-in-talks-to-acquire-tumblr-reports-503443/