US digital media major Yahoo! Inc (NASDAQ:YHOO) has reached an agreement to buy social blogging website operator Tumblr Inc for USD1.1bn (EUR855.4) in cash as both boards had approved the transaction, informed people told the Wall Street Journal.
The parties could unveil a deal today, one of the sources has said, thus supporting previous reports by AllthingsD. Last week, the news website said that Yahoo! was negotiating the purchase. Its first report followed Yahoo! CFO Ken Goldman’s comment at JP Morgan’s Global Technology conference that the company was looking for ways to become “cool” again and attract younger users.
The agreed transaction would carry a premium as Tumblr was worth USD800m the last time it raised money in late 2011, the WSJ said. The New York-based blogging site’s CEO David Karp told the Los Angeles Times recently that Tumblr had revenues of just USD13m last year.
According to the WSJ sources, Karp will continue to run the business following the acquisition.
Set up in 2007, Tumblr employs some 175 people and features over 108m blogs.