Yahoo Buys Tumblr for $1.1 Billion- But What will hedge fund mastermind Dan Loeb Do next?
That’s one way to look at it- any other ideas? x > xboxlive?
F*ck Yeah – Tumblr CEO David Karp signed a note announcing Yahoo! Inc. (YHOO)’s $1.1 billion acquisition with the closing.
Tumblr and Porn
There is the porn, obviously. To recap, approximately one in every six pages on Tumblr has some kind of adult content, according to PrivCo, a firm that tracks private companies. Tumblr has been quietly chopping down on the smut, and only one of its top 25 sites today is pornographic.
The rest of Tumblr’s most popular blogs are SFW, but they’re not exactly mainstream. The single most-visited Tumblr is dedicated to Minecraft, followed by a Portuguese-language site specializing in animated GIFS and one that translates people’s names into various languages spoken on science fiction shows. Professional media outlets and brands make up three of the top 25 (Comedy Central; Clarin, the Argentine newspaper; and Angry Birds). Other particularly popular sites are a blog juxtaposing handsome men and adorable kittens; a blog shaming people who act like douchebags on other social-media platforms; and various collections of cartoons.
Karp founded the company using money and experience he had acquired as a software consultant for the website UrbanBaby. The CEO grew up on Manhattan’s Upper West Side and dropped out of Bronx High School of Science before moving by himself to Tokyo when he was 17. He founded Tumblr after returning to New York and learning computer programming. He still hasn’t earned his high school diploma.
Karp updates his own Tumblr with quotations, photos, animated GIFs and snippets of conversations with girlfriend Rachel Eakley. He lives a minimalist existence in an apartment in Williamsburg, Brooklyn, Sabet said.
For Yahoo CEO Marissa Mayer, the purchase adds a service with more than 13 billion monthly page views and brings more young entrepreneurs into the fold. Yahoo bought Summly, the developer of a news-reading application, for $30 million in March that deal made 17-year-old founder Nick D’Aloisio millionaire.
David Karp, a 26-year-old who started the company in 2007, is getting $253 million in cash from the transaction.
The company, popular among teens and 20-somethings, only started accepting advertising last year. Karp told the Los Angeles Times in 2010 that he was opposed to Web advertising, saying “it really turns our stomachs.”
Tumblr ultimately adopted an approach to advertising that lets users pay money to make their posts more prominent on the site. The company expanded the program to the mobile version of its service, a bid to get closer to profitability. The company had about $13 million in 2012 revenue.