The deal, which had been rumored since last Thursday, will help Yahoo to tap into the younger, active online user base at Tumblr. But the deal raises concerns among some Tumblr fans that the site could end up being cluttered by the ads that brings in billions of dollars a year to Yahoo. Tumblr CEO and founder David Karp has resisted the use of traditional display advertising on Tumblr to this point.
To answer those worries, Yahoo said that Tumblr will be independently operated as a separate business with Karp staying on as CEO. Yahoo CEO Marissa Mayer posted her own Tumblr post to try to assure fans of the site they need not panic. In a call with investors and analysts Monday, Mayer referred to the deal as a "game changer" for Yahoo. She said there will be no Yahoo branding on Tumblr.
Tumblr has 300 million monthly unique visitors and 120,000 sign-ups every day, with about 900 posts a second. But as much traffic as it generates, not all the content is ideal for advertisers.
"Tumblr does not insist on knowing the real identities for users, and some of the Tumblr content is very adult-oriented, both features that advertisers would find repellant," said Brian Proffitt, an adjunct instructor of management at the University of Notre Dame.