Yahoo Board Approves a $1.1B Pricetag For Tumblr

TechCrunch reports that Yahoo's string of acquisitions may soon include Tumblr: "The Wall Street Journal is now reporting via Twitter that the rumored $1.1 billion cash acquisition deal for social blogging site Tumblr has been approved by Yahoo’s board of directors. The Tumblr acquisition was rumored last week, with a price tag reportedly north of $1 billion, which appears to be accurate if the WSJ’s sources are correct." The article notes, too, that "Yahoo had only $1.2 billion cash on hand as of its most recent quarterly earnings, which makes an all-cash offer for Tumblr a lot more of a stretch than it would be for someone like Apple, or even Facebook, which acquired Instagram for $1 billion in a mix of both cash and stock."

Comments

Let's see

[Intrepid imaginaut]

From wiki: Tumblr made $13 million in revenue in 2012 and hopes to make $100 million in 2013. So far, Tumblr has taken $125 million in funding from its backers. Tumblr reportedly spent $25 million to fund operations last year.

So it's making a loss of $12 million a year and yahoo is willing to fork over $1.1 billion on the hope that it might actually make $100 million this year?

Interesting!

Something stinks here

[randomErr]

A company that has $13 million in revenue in 2012 and hopes to only make $100 million in 2013 is purchased for 1.1 billion? This smells of a multi-level pump and dump scheme.

I will bet what will happen in the next 18 months is: Yahoo buy's out Tumblr. Tumblr's CEO sells all his stock Monday morning and get insanely rich. The new tYahoo company goes bankrupt by the end of the year. Microsoft or Bill Gates himself will swoop in and FINALLY by buy Yahoo making the current CEO insanely rich. If gates himself buys it sells Yahoo back to MS and adds to his insane fortune. Microsoft and integrates all of tYahoo's tech into MS and starts a second round of war against Google search and Google products.