Reports: Yahoo in talks to acquire Tumblr for $1B

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Yahoo is in advanced discussions to acquire social networking platform Tumblr for as much as $1 billion, Adweek reports. AllThingsD first reported on the talks, noting the two firms are also mulling strategic alliance and investment options.

Tumblr enables users to post multimedia and other digital content as short-form blog entries. Its network spans more than 96 million blogs in all and generates more than 16 billion page views per month, buoyed by apps for Apple's (NASDAQ:AAPL) iOS, Google's (NASDAQ:GOOG) Android and Microsoft's (NASDAQ:MSFT) Windows Phone 8 that support on-the-go sharing of photos, GIFs, video clips, quotes and messages. In a recent interview with Bloomberg, Tumblr Head of Sales Lee Brown said that the number of users accessing Tumblr's mobile apps has quadrupled over the past six months, coming close to its Web traffic totals.

Tumblr has raised $125 million in venture financing at a reported valuation of $800 million--AllThingsD notes the firm is currently raising a new funding round that could value its platform at $1 billion. Last month, Tumblr launched mobile advertising efforts across its iOS and Android apps: Users see up to four ads each day, distinguished from other posts by an animated dollar sign icon. Brown has said that the average ad purchase on its network is now "just under six figures," and with the expansion to smartphones, "We expect that the monetization will lead us to profitability this year."

Acquiring Tumblr and its hipster cachet could help make over Yahoo's public image and attract users within the coveted 18-to-24-year-old demographic. Speaking this week at JP Morgan's Global Technology conference, Yahoo CFO Ken Goldman said the company must become "cool again," adding "One of our challenges is we have had an aging demographic. Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years."

Yahoo has been on a spending spree since former Google executive Marissa Mayer took over as CEO in mid-2012. Yahoo recently acquired mobile-focused startups including Summly, Jybe, Alike, Stamped and Astrid. Mobile is one of Mayer's four key focus areas, alongside search, display and video.

Last month Yahoo said it counted 300 million mobile monthly users, up from 200 million at the end of last year. The company credited the increase to recent overhauls of its mobile and desktop sites but said it is also likely due to users' overall shift from desktop Internet surfing to accessing the Web from their smartphones.

For more:
- read this Adweek article
- read this AllThingsD article

Related articles:
Tumblr expands to Microsoft's Windows Phone 8
Tumblr turns to promoted posts to monetize mobile apps
Yahoo continues mobile shopping spree, buys Astrid to-do app
Yahoo pulls the plug on Messenger, Mail apps for feature phones
Yahoo: We now have 300 million mobile monthly users

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