Yahoo to spend $1.1 billion for Tumblr, taking on Twitter, Facebook, Google+

Infotech Lead Asia: Taking on Google’s aspiration to grow Google+, rival Yahoo has acquired Tumblr, for approximately $1.1 billion.

For Yahoo CEO Marissa Mayer, the acquisition of Tumblr will bring lots of business besides immediate increase in market share, though she will take several more months to compete with Google, her previous employer.

For Yahoo CEO Marissa Mayer, the acquisition is a vital tool boost revenues as Yahoo’s revenue in Q1 2013 fell 7 percent from last year to $1.1 billion. Yahoo earned $390 million, or 35 cents per share, during the first three months of the year. That’s a 36 percent increase from income of $286 million at the same time last year.

In Q1, Facebook posted revenue of $1.46 billion, up 38 percent over the same period in 2012. Facebook’s net income reached $312 million.

Daily active users increased to 665 million compared with 526 million in Q1 2012.

Facebook rival Instagram saw a significant boost, with more than 100 million people actively using the service each month.

Google is struggling to grow Google+, the global search giant’s answer to Facebook and Twitter.

Yahoo promises that it will not screw it up, after buying Tumblr. In fact, David Karp will remain CEO.

This means, Tumblr will retain its identity.

The acquisition means a lot to Yahoo.

Tumblr has more than 300 million monthly unique visitors. In addition, the media network has 120,000 signups every day.

Tumblr sees 900 posts per second and 24 billion minutes spent on site each month.

On mobile, more than half of Tumblr’s users are using the mobile app and do an average of 7 sessions per day.

For Facebook, which has several thousands of inactive users, strong mobile strategy is important to revitalize its business as users are moving to mobile from desktops for their news sharing activities.

For Facebook, 751 million users are already accessing the site each month through smartphones and tablets, though the company’s efforts in that arena may be better reflected in the future — the site’s legacy products are responsible for Q1 2013’s figures.

The combination of Tumblr+Yahoo is expected to grow Yahoo’s audience by 50 percent to more than a billion monthly visitors, and to grow traffic by approximately 20 percent.

Tumblr can deploy Yahoo’s personalization technology and search infrastructure to help its users discover creators, bloggers, and content.

In turn, Tumblr brings 50 billion blog posts and 75 million more arriving each day to Yahoo’s media network and search experiences.

In addition, the two companies will also work together to create advertising opportunities that are seamless and enhance the user experience. This means it will give more competition to Google, Facebook, Twitter, etc.

Yahoo CEO Marissa Mayer said: “Yahoo is the Internet’s original media network. Tumblr is the Internet’s fastest-growing media frenzy.”

Yahoo has now bought Tumblr. But can the search engine company revive its advertisement business in coming quarter. Yahoo has been lagging the growth in the overall ad market, a trend expected to continue at least through the rest of this year.

In Yahoo’s main market, the U.S., the company’s ad revenue this year is expected to increase by about 3 percent, according to the research firm eMarketer. That contrasts with an anticipated 25 percent gain in overall spending on digital ads in the U.S. this year, eMarketer said.

Baburajan K
[email protected]