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20 May 2013updated 22 Oct 2020 3:55pm

Yahoo buys Tumblr

Part of a wider trend.

By mark brierley

Internet giant Yahoo has now announced the purchase of blogging site Tumblr in a $1.1bn (£720m) deal. At a press conference, former Google executive and current Yahoo CEO, Marissa Mayer announced the news in New York’s Times Square, following a meeting with the Yahoo board on Sunday.

Launched from the bedroom of founder David Karp in 2007, Tumblr today boasts 110m users, a similar number to those using Yahoo’s services, and currently hosts 42m blogs on its site. A success story since day one, within a fortnight of its launch, 75,000 bloggers were already logging on regularly.

This acquisition is the latest attempt by Yahoo to shore up its business, having lost much of the market share of its core search business. Once a leading search engine and web portal in the US, Yahoo is attempting to diversify its product offering, following the erosion of several of its products by the rise and rise of rivals Google and Facebook.

Tumblr will give the organisation access to a thriving user base and hopefully steady the ship, after a stormy few years for Yahoo, which has seen six different executives in the top job since 2009, and the workforce cut by 2,000 in 2012. The purchase of the blogging site, plus social news platform Snip.it in January, signal Mayer’s intention to grow through acquisitions.

It marks a wider trend in the technology industry, which has seen a number of large players competing to snap up fast-growing internet start-ups, giving them access to a rapidly expanding user base and new means of communication with their customers.

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Mayer has certainly made an impact since her appointment in July 2012, cutting Yahoo’s products from around 60 to just a core of around a dozen, plus a strict new hiring process and the outlawing of working from home. Criticism and praise have been heaped on her in equal measure, but this latest deal could make or break her time at the top, with industry analysts questioning how a company can pay $1.1bn cash for Tumblr, having recorded just £13m in sales in 2012.