Yahoo buying Tumblr for $1.1 b

REUTERS: Yahoo Inc said it is acquiring blogging service Tumblr for $1.1 billion cash, a bold bet by Chief Executive Marissa Mayer to revitalize the struggling Internet pioneer by co-opting a Web property with strong visitor traffic but little revenue.

The deal, which will use about a fifth of Yahoo’s $5.4 billion in cash and marketable securities, is the largest by far since Mayer took the reins in July seeking to reverse a multi-year decline in Yahoo’s business and Web traffic.

“Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business,” Yahoo said in a statement on Monday.

Tumblr is one of the Web’s most popular hubs of so-called user-generated content. The deal will provide Yahoo with a much-needed platform in social media to reach a younger generation of users less tied to Yahoo’s traditional Web portal and email services.

Yahoo remains one of the Web’s most popular destinations, with hundreds of millions of monthly users, but the company has seen its revenue shrink in recent years as consumers and advertisers favor rivals such as Google Inc and Facebook Inc.

Yahoo said the acquisition is expected to increase its audience by 50% to more than a billion monthly visitors.

David Karp, who founded Tumblr in 2007, will remain CEO.