Yahoo! buys Tumblr for $1,1 billion and revamps Flickr

Marissa Mayer in 2007
Marissa Mayer in 2007

Yahoo! CEO Marissa Mayer (photo ©Mrgadget3000) announced that the company has reached an agreement to purchase the multimedia social microblogging service Tumblr for $1.1 billion which will be paid all in cash. One of the first questions was about the future of Flickr, the pictures and videos hosting service acquired by Yahoo! in 2005. Well, a few hours later Marissa Mayer announced that the site has been improved and now every user will have a Terabyte of free space.

Launched in February 2007 by David Karp, who then remained as CEO, and Marco Arment, Tumblr is now home to about 105 million blogs. The acquisition by Yahoo! is reminiscent of Instagram‘s acquisition by Facebook which took place last year. Indeed, there seem to be common points since Tumblr is social and is also available on mobile devices, two features that in recent years are adding big value to a service.

The need for Yahoo! however, is to revitalize itself while Facebook was aiming to continue its growth and reach its IPO in the best possible way. In her announcement, Marissa Mayer promised not to screw Tumblr, which will continue to operate independently. The reference for which she used a very unusual expression in an announcement of that kind is likely to be to previous acquisitions by Yahoo! of services which were then left to die such as GeoCities or anyway lost much value such as Delicious.

Flickr was also among the services purchased by Yahoo! that hadn’t been developed and the announcement of the Tumblr acquisition could sound like the hammer on the nails in Flickr’s coffin. Those doubts lasted only a few hours because Marissa Mayer announced the redesign of this service and the offer of a Terabyte of free space for each user. You can also purchase Flickr’s pay services to get rid of ads or have 2 Terabytes of space. A new Android application was also launched to use Flickr from your mobile devices with this operating system.

The rumors about the acquisition of Tumblr had been around for days and several users left the service while others launched a petition asking that it wasn’t sold to Yahoo! but they’re a small minority. The approval of the majority of users is still to be evaluated.

If Marissa Mayer and her collaborators can make money from non-invasive forms of advertising on Tumblr the considerable expense will be a success, otherwise once more we’ll comment the mistakes that led Yahoo! to be a great Internet company now decaying. In the social and mobile services bubble this is perhaps the main test of the Marissa Mayer’s skills.

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