Yahoo’s Acquisition of Tumblr For 1.1 Billion Dollars

Yahoo’s 1.1 Billion Dollar Acquisition

With Yahoo acquiring Tumblr for 1.1 Billion dollars a lot of the followers and supporters of Tumblr are concerned about the potential changes that may happen to the beloved micro-blogging website. The overall strategy for Yahoo is to become the powerhouse they used to be many years ago. Since the hiring of Marissa Mayer she has been aggressive from the start that she will change the luck of the Internet Giant. One of the best ways to do that is to buy one of the most popular micro-blogging websites on the internet.

In order for Yahoo to become relevant again they need to target one of the most important demographics in the web, teenagers and young adults. Just like in television and how the 18-34 demographic is the most important for a show to be a success this is a similar type of idea that Yahoo is trying to succeed with. With 40% of 15-24 year olds using Tumblr it makes sense for Yahoo to make the big move and take the opportunity and grow their 24% 15-24 year old demographic.

Advertising Opportunity For Businesses

Getting the opportunity to tap into an audience that they have lost is important for Yahoo. With the chart above from comScore you see where the audience is based on the age grouping. The younger the crowd the more they are on Tumblr. With this acquisition Yahoo does hope to reach a new target and even provide an advertising opportunity for businesses that can reach a younger audience with their existing and new products.

Is this purchase the right move? Did Yahoo pay too much? Maybe, but at the end of the day it comes down to advertising dollars coming in for the company. It is the overall plan for Marissa Mayer to make Yahoo what it once was as a major player on the web. It’s harder than what it seems but she has a plan that is going to help Yahoo grow and become a force for years to come. A lot of people do not like the idea of Tumblr being under the Yahoo umbrella but if the company doesn’t go in and try to completely change the popular micro-blogging site then a large part of the 40% could help Yahoo’s purchase of Tumblr worth every penny.

http://money.cnn.com/2013/05/20/technology/yahoo-buys-tumblr/index.html