Yahoo! Inc CEO Marissa Mayer is betting the future of the largest US web portal on the success of its acquisition of a six-year old start up firm with little revenue generation systems and a relaxed policy on content created by its users.
For the purchase of Tumblr, Yahoo would be paying out US$1.1 billion. The set up would be that the New York based blogging start up would retain its founder David Karp as its CEO and be run as an independent business under the auspices of the Sunnyvale, CA based search engine.
The main draw of Tumblr is its growing audience base as well as its sucess in mobile and social networking areas. This, Yahoo hopes, would help reel in users and advertisers back to Yahoo through Tumblr, as against Google and Facebook. The advertising market has been projected to be within the US$17.7 billion range.
The main drawback though is the content of Tumblr, where on average one in every six pages has adult content. This could be the Achilles heel to the deal, as it may turn off users into the blogging site as well as hold back advertisers and marketers in putting money for ads.
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