Social Media Update: Yahoo Inc. Acquires Tumblr for $1.1 Billion

Posted on: May 20th, 2013

Yahoo Inc. officially announced today that it has acquired Tumblr, a popular social media blogging website, for $1.1 billion in cash. Negotiation speculations were running viral in many technology and business forums over the weekend. The deal is risky for both parties with the potential to bring great success or failure.

Historically, Tumblr denied selling advertising space to maintain its most prized feature – the feeling of community among its users. Loyal Tumblr bloggers are feeling apprehensive, afraid that the unique blogging experience on the social media site may be compromised with an avalanche of advertisements. From an advertiser’s perspective, the acquisition is an opening opportunity to reach millions and millions of users and visitors with marketing messaging.

Yahoo Inc.’s CEO, Marissa Mayer, posted that she will “not screw it up” for all who love Tumblr. She is, indeed, walking on tricky ground considering the extreme risk and burden that the deal is placing on the company finances. Only time will tell if the business transactions will prove to be successful.

For a more in-depth analysis, check out the Wall Street Journal and Reuters articles.

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