Internet giant eyes the micro-blogging site in order to boost its appeal amongst younger web users

Yahoo set to buy out Tumblr with $1.1bn bid

Yahoo is reportedly on the verge of confirming a deal, which will see the internet giant take on blogging site Tumblr for $1.1bn.

Whilst the move is yet to be confirmed by either party, Yahoo head Marrisa Mayer has scheduled a new conference for later day, which Mayer has said will reveal "something special".

Mayer reportedly staged a board meeting on Sunday in order to discuss the proposed deal.

It is believed that Yahoo’s interest in Tumblr is an attempt to connect with a much younger audience, as the firm struggles to compete with rival Google.

Most recently, a survey found Tumblr to be more popular than Facebook amongst 13 to 25 year olds.

Founded in 2007 by David Karp, the site hosts over 108 million blogs, through which users have to date published over 50.9 billion posts via the service.

Yahoo’s $1.1bn bid falls in line with the most recent valuation of Tumblr, which was estimated at $800m in 2011.

It is understood that whilst Karp will receive a cash payment for Tumblr, he will remain at Yahoo on an initial four-year period, maintaining control of the site.

Andrew Yates, CEO and co-founder of Artesian Solutions, highlights the move as a necessary one for Yahoo as it looks to develop its own social footprint, capable of rivalling Google.

“The news that Yahoo! is set to acquire Tumblr reflects the importance of developing a social footprint for the big technology players. Yahoo! is following in the footsteps of smart businesses that have recognised the need to be agile, socially connected and transparent in order to engage today’s internet users," said Yates.

"Tumblr provides Yahoo! with a captive audience that it can engage with using its existing advertising model to break into both the social and mobile domain."

"In addition, at a time when many social platforms are struggling to monetise mobile channels, users of Tumblr’s mobile advertising product have quadrupled over the last year. However, it remains to be seen whether Yahoo! will capitalise on Tumblr’s user growth to deliver a return on investment."

"As the commercial value of social channels continues to rise, we will see more large vendors look to defend their dominance in the competitor landscape by acquiring young social start-ups," summarised Yates.

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