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Yahoo's board of directors has approved a deal to buy the popular blogging platform Tumblr, the Wall Street Journal reports.
According to the WSJ, it will pay $1.1 billion in cash for the site. The potential purchase was originally report by the technology blog AllThingsD on Thursday, which also cited the same cash figure.
Originally posted by antonia
Social Media is a nascent bubble. Tumblr is not worth a billion dollars. I personally use it and enjoy it, but there is no way it is worth a billion dollars. They haven't even figured out to effectively integrate advertising throughout the entire site. There is no profit model, in fact, I have to hear of any serious profit figures from Tumblr itself. 13 million for 2012 has been thrown around, Tumblr execs said they hope to make 100 million this year. Considering we don't know their operating costs, I'd say it's foolish to proclaim they are worth over a billion dollars.edit on 19-5-2013 by antonia because: opps
Originally posted by Cabin
They might not be using their ad service well, although it has huge potential and huge userbase. If the system was developed further 1,1 billion is quite and quite a bargain considering tumblr is in the top20 most-viewed websites in the world. If ads were used very well, the potential earnings could skyrocket.