Yahoo to Acquire Tumblr

YAHOO TAKES A TUMBLR: The Yahoo board has agreed to buy the popular blogging site Tumblr for $1.1 billion in cash, hoping to reposition itself in the burgeoning world of social media. The deal would surpass Facebook’s $1 billion purchase of Instagram last year, the biggest yet for chief executive Marissa Mayer, who came aboard from Google last summer to revitalize the once-dominant search company. The six-year-old Tumblr has raised millions from big-name investors, but, like similar companies in the space, has not proven it can be profitable, or succeed on mobile devices. Yahoo’s previous acquisitions included Flickr for $35 million and GeoCities for $3.6 billion, neither of which have made much of a dent. Yahoo has up to $4.3 billion in cash from selling half of its stake in the Chinese Internet giant Alibaba. The company has also had conversations with Foursquare and Hulu. Yahoo’s share of digital ad revenue has dropped to 8.4% from a 15.5% in 2009, with Google claiming 41%. (5/20a)