The online blogging forum is now being purchased by the search engine giant in a recovery effort.
Yahoo! has announced in its latest technology news that it is purchasing the massively popular online blogging forum, Tumblr, for a cool $1.1 billion in order to breathe some life back into itself.
The CEO of Yahoo!, Marissa Mayer, is aiming to rejuvenate what was once the top search engine.
The company has managed to fall behind and Mayer is now making an aggressive acquisition to help to reverse this trend. The deal was first announced on Monday and is the boldest move that she has made with the company, since she left Google just under a year ago in order to lead the latest comeback effort at Yahoo! This is also the most expensive acquisition that the search engine company has made since the purchase of Overture ten years ago. That purchase made technology news headlines when Yahoo! forked over $1.3 billion in stock and cash.
This technology news will involve a payment all in cash, taking a chunk out of Yahoo’s reserves.
The company has been holding $7.6 billion in windfall, which it brought in when it sold half of its stake in Alibaba Holdings Group, the Chinese internet company. This means that the acquisition of Tumblr will take up approximately a fifth of the $5.4 billion that Yahoo! was storing in its accounts by the close of the first quarter of the year.
At the same time that Yahoo! made its acquisition technology news headlines, it also announced that the CEO of Tumblr, David Karp, would be maintaining his position “per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business.” Karp first started that company six years ago. Both businesses hope that it will soon become a central player in a massive recovery for Yahoo! to become the most influential companies on the internet once more. This is a position that it has not held in 13 years, since it was surpassed by Google – with the help of Mayer, who worked there at the time.