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Yahoo! gets a leg up with Tumblr deal

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DQI Bureau
New Update

Tumblr, the online blog platform, has been acquired by Yahoo!. The Yahoo board has given the nod to CEO Marissa Mayer's plans to acquire publishing platform Tumblr for $1.1 bn.

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This is being considered a big win for the young founder and CEO, David Karp who will continue to operate the venture under the Yahoo! banner. This is also being deemed as a show of power for Yahoo! for which this would be company's biggest acquisition in almost 10 years.

Nevertheless, it would give a peg for Yahoo! into the younger, growing audience of Tumblr. Tumblr's audience has more than doubled from 58 mn unique users since last year and is being considered one of the fastest growing startups worldwide.

Market analysts say the acquisition would be a big bet for Yahoo, given Tumblr's financial performance so far. For Yahoo! this deal would come as a propeller for growth. The annual revenue has been stuck for years around $5 bn and though it has a big presence on PCs, it hasn't been able to build the same on mobile devices.

Clearly, this could become one good counter for Yahoo! against Apple Inc's coveted hardware or Google's smartphone operating software, Android. One of the key reasons and core strength for Tumblr's growing popularity has been its resistance to advertising. The future play would be keenly watched to see if Karp succumbs to this under the Yahoo! banner.

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