Tumblr to be Acquired by Yahoo: $1.1 Billion deal

A few months ago the Tumblr had allowed few companies to know that it was possibly interested in being acquired. Then, reportedly, Yahoo was the first to approach them with a handsome amount. It was said that Tumblr was apprehensive about the deal worth $1.1 billion cash, though. It is also a reasonable point for tumblr to hesitate on the much smaller $1.1 billion deal because recently a younger Instagram's acquisition price itself was supposedly said to be $1 billion.

Yesterday, reportedly, it was said that Yahoo had sent press invites to a "product-related" event in New York City Monday afternoon about the company's plans and there were already two separate rumors with the same regards. The first came from Bloomberg, concerning the event in particular and cited a "person familiar with the matter" reporting that they would hear about new updates on Yahoo's once-mighty Flickr photo service. At the same time AllThingsD was reported to have said that the company's board would meet on Sunday to decide whether it will make a $1.1 billion all-cash offer for the site. This has further increased the rumors of a Tumblr purchase from possible to more likely. Since new CEO Marissa Mayer took over Yahoo everyone has observed a number of acquisitions it has made with a focus on improving its homepage, content and apps offerings including Flickr.

Reportedly it was said that sources who were close to the acquisition talk between Yahoo and Tumblr also said that the blogging platform felt $1.1 billion offer as "too low" and viewed it as "only a first offer". Yahoo may thus have to think about increasing the offer to close the deal soon as Forbes also reported about Facebook and Microsoft having interest in acquiring Tumblr. It was also reported that the acquisition is likely to take place with the Tumblr as it was said that the company has only got a couple of months of cash runway left.

Reports also say that Tumblr employees were told that the company only had enough funds to operate for a few more months, as its costs far exceeded the limited revenue it earned.

If Yahoo promises Tumblr's CEO David Karpfor a better deal they may possibly retain control of the company soon.