Yahoo! Inc. (NASDAQ:YHOO) still has its share of following after being one of the pioneering Internet companies back when Al Gore invented it. However, there is little doubt that Yahoo! has lost much of its street cred and a large portion of its relevancy in the tech and Internet world over the last several years, mainly thanks to the aggressive marketing and advertising platform of Google Inc (NASDAQ:GOOG). But since Yahoo! took the step to hire former Google exec Marissa Mayer as CEO, it has been trying to reverse its fortunes in its many platforms.
With this latest confirmed deal, however, Yahoo! Inc. (NASDAQ:YHOO) seems to be ready to launch full-bore into another platform – blogging. Monday morning, Yahoo! confirmed that it has reached a deal to purchase blogging site Tumblr for about $1.1 billion, most of it coming in cold, hard cash. The deal is expected to be finalized sometime in the second half of the year. Word is that this will not be a “acquire,” where Yahoo! will absorb all of the employees and the platform. Tumblr will be run independently as it has been, but will work with Yahoo! for advertising and other revenue opportunities for both companies.
In a blog post on the company’s blog now located on Tumblr, Yahoo! Inc. (NASDAQ:YHOO) CEO Mayer said, “We promise not to screw it up. Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently. David Karp will remain CEO. The product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve. Yahoo! will help Tumblr get even better, faster.”
This could be a move for Yahoo! Inc. (NASDAQ:YHOO) to reach a new audience, as a recent survey revealed that Tumblr is actually more popular among 13- to 25-year-olds than Facebook Inc (NASDAQ:FB). And as this demographic is very tech-savvy and Internet savvy, Yahoo! could find its way into their consciousness, fighting for space alongside Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL).
What do you think? Will this help Yahoo! Inc. (NASDAQ:YHOO) re-invent itself? Do you think $1 billion is a good price to pay for a company with $13 million in revenues last year? Or is this purchase price more about potential? Let us know your thoughts in the comments section below.