Yahoo (YHOO) Looks to Buy 'Cool' With $1B Deal for Tumblr
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Shareholders of Yahoo, Inc. (NASDAQ: YHOO) are taking in stride reports the company is in talks to acquire Tumblr for $1 billion.
The move by Yahoo is an apparent attempt to get "cool again," AllThingD reported, especially with the all-important 18-to-24 demographic.
Earlier in the week, Yahoo CFO Ken Goldman said,"one of our challenges is we have had an aging demographic." He continued, "Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years."
Tumblr, by all accounts, is "cool." The company boasted worldwide traffic of 117 million visitors in April, according to comscore. Its young user base uses the site to post blogs, photos and videos. Tumblr is said to have had sales of $13 million in 2012, and suggested that could rise to $100 million this year.
So there you have it - Yahoo! is attempting to buy "cool" with $1 billion of shareholder wealth. Is it worth it? So far, investors aren't overly enthusiastic on a potential deal, or overly negative. Shares are trading roughly flat in pre-open trading Friday.
The move by Yahoo is an apparent attempt to get "cool again," AllThingD reported, especially with the all-important 18-to-24 demographic.
Earlier in the week, Yahoo CFO Ken Goldman said,"one of our challenges is we have had an aging demographic." He continued, "Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years."
Tumblr, by all accounts, is "cool." The company boasted worldwide traffic of 117 million visitors in April, according to comscore. Its young user base uses the site to post blogs, photos and videos. Tumblr is said to have had sales of $13 million in 2012, and suggested that could rise to $100 million this year.
So there you have it - Yahoo! is attempting to buy "cool" with $1 billion of shareholder wealth. Is it worth it? So far, investors aren't overly enthusiastic on a potential deal, or overly negative. Shares are trading roughly flat in pre-open trading Friday.
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