It's official: Yahoo will buy Tumblr for $US1.1 billion

After a weekend full of rumor and speculation, Yahoo confirms its plans to buy Tumblr for $US1.1 billion in cash.

After a weekend chock full of rumors and speculation, Yahoo has announced it plans to acquire Tumblr, the popular social service that hosts more than 105 million GIF-filled blogs, for $US1.1 billion in cash.

That's a whole lot of users, and a whole lot of cash. In her announcement--appropriately posted on Yahoo's Tumblr blog--Yahoo CEO Marissa Mayer promised "not to screw it up."

The deal is the largest made by Marissa Mayer since she took over Yahoo last summer and follows nine other acquisitions by the company. The Tumblr transaction, which is subject to customary closing conditions, is expected to take effect in the second half of the year.

Founder David Karp will continue as chief executive officer of Tumblr and "the product roadmap, their team, their wit, and irreverence will all remain the same," Mayer said.

The heads of the two companies took to Tumblr to explain the union and (hopefully) alleviate some fears.

"Yahoo will help Tumblr get even better, faster. In terms of working together, Tumblr can deploy Yahoo's personalization technology and search infrastructure to help its users discover creators, bloggers, and content they'll love. The two companies will also work together to create advertising opportunities that are seamless and enhance user experience," Yahoo CEO Mayer said.

Tumblr CEO Karp wrote on his company's blog: "Before touching on how awesome this is, let me try to allay any concerns: We're not turning purple. Our headquarters isn't moving. Our team isn't changing. Our roadmap isn't changing. And our mission--to empower creators to make their best work and get it in front of the audience they deserve--certainly isn't changing. The work ahead of us remains the same--and we still have a long way to go!--but with more resources to draw from."

In a press release, Yahoo said Tumblr has more than 300 million monthly unique visitors and 120,000 signups every day; it sees 900 posts per second and 24 billion minutes spent on site each month. The combination of Tumblr and Yahoo is expected to grow Yahoo's audience by 50 percent, to more than a billion monthly visitors. Yahoo's traffic is also expected to grow by approximately 20 percent.

Not so smooth sailing

Not everyone is as optimistic as Karp and Mayer, however. Unhappy Tumblr users have expressed their discontent with the buyout in droves, as is readily evident by simply searching for "Yahoo" on Tumblr and witnessing a flood of images.

"They fear loss of control over the interface, over privacy, and over the freedom of expression in general," Gartner analyst Andrew Frank told IDG News Service via email.

Meanwhile, Matt Mullenweg, the founder of rival blogging service WordPress, noted on his blog Sunday that the rumors of the Tumblr acquisition at the weekend have already prompted a massive spike in users importing their Tumblr posts to WordPress.

"Normally we import 400-600 posts an hour from Tumblr, last hour it was over 72,000," he wrote.

Continuing, Mullenweg expressed what sounded like slight remorse over the Tumblr-Yahoo marriage. "I'm curious to see what the creative folks behind Tumblr do with their new resources, both personal and corporate, but I'm more interested to know what they would have done over the next 5-10 years as an independent company."

IDG News Service's Chris Kanaracus contributed to this report. 

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