I won’t go into any detailed history of the companies or their founders or principals. You can find that other places on the web.
For those who don’t remember, or are too young to have heard of it, Yahoo! is a huge internet company with search, mail, advertising, mapping and many other services. It grew very rapidly in the 90’s and became a very popular web portal. In recent years its fortunes have faded. Yahoo! has gone through many management changes, layoffs, and restructurings, and many people feel it’s lost its identity and become directionless.
Tumblr is a micro-blogging and social networking website. It’s very popular with the younger crowd, mostly teens and college-aged users. It’s quite free-wheeling, you can post almost anything you want there… even porn. It’s also had a very rapid growth, now hosting over 108 million blogs and over 50 billion blog posts.
Tumblr has received and burned through around $125 million in private capital since its debut in 2007. It made only $13 million in revenue in 2012 and expected to make $100 million this year.
Response to the acquisition has been mixed, especially concerning any benefit it will have for Yahoo!. It certainly benefits Tumblr. They were running out of money and financing.
I have no insightful opinion about the deal. I’m not a Tumblr user and I haven’t used Yahoo! in any significant way in many years. Below are links to reports and some pro/con opinions from around the web.
GigaOM initial report.
Time Magazine report.
CNN Money report.
Wired dot com opinion.
Huffington Post report concerning the porn.
NBC News Tumblr’s teenage wasteland.
Slate report on Tumblr users' reactions.
Readwrite Yahoo!’s identity crisis.
Readwrite Who hates the deal? Tumblr’s users.