In a deal that would vault Yahoo into the premiere league of social media, Yahoo CEO Marissa Mayer is said to be closing in on a $1 billion acquisition deal with David Karp, the CEO of New York-based Tumblr.
Details of the talks leaked out earlier Thursday via AllThingsD, a site which prides itself on its Yahoo sources in particular. A later report in AdWeek, via its own sources, cited $1 billion as the figure currently under discussion. Coincidentally, that is said to be the valuation Tumblr was going to get at its next funding round.
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Both sites were cautious to emphasize that the talks could come to naught. Mayer is clearly interested; she's known and admired Karp's New York-based site for years. Tumblr and its 107 million microblogs would add another 15 billion pageviews a month to Mayer's hoard. Most important of all, it could make Yahoo look cool again.
SEE ALSO: Future Growth Potential of Tumblr
Given its aging audience, Yahoo's biggest problem with advertisers right now, the hunt for cool companies is high on Mayer's agenda. That would be why she offered $30 million to a startup run by a charismatic 17-year-old.
The question remains whether Karp is ready to sell, and whether he believes Tumblr has a better path ahead of it as a media company without Yahoo's help. (Naturally, we've reached out to both companies.)
Tumblr hasn't put a step wrong in the last few months, as far as investors and marketers are concerned, and it's growing like a weed. It's also hitting all the hot button tech and social media targets. Mobile audience overtaking web audience? Check. Ads on mobile? Check. Great shareable memes such as White Men Wearing Google Glass? Check. A platform so cool the White House is forced to join it? Check.
A $1 billion price tag would make Tumblr the biggest purchase since Facebook bought Instagram last year — although that deal ended up costing closer to $715 million, thanks to slumping Facebook share prices.
While we update this story, let us know in the comments: would these companies make a good match? Or should Karp stay independent?
Photo: JOHANNES EISELE/AFP/Getty Images
Courtesy: Mashable
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