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Marissa brings Tumblr into the Yahoo family for $1.1 billion

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By Noel Young, Correspondent

May 19, 2013 | 3 min read

So the rumours were true! Yahoo is buying the blogging website Tumblr, founded six years ago by David Karp in his bedroom in his mother's apartment in New York.

Marissa Mayer: A big buy!

The Yahoo board has agreed to pay $1.1 billion in cash for the company, said the Wall Street Journal on Sunday, quoting "people familiar with the matter".

Tumblr will continue to operate largely as an independent business, the people said.

Tumblr, founded in 2007, has built a huge youthful following by making it easy for people to post blogs and photos, follow others on Tumblr and receive updates via a feed.

The website's simple design has "lowered the bar for online publishing and effectively merged blogging with social media," said the WSJ.

Buying Tumblr, is right in line with Yahoo CEO Marissa Mayer's plan to improve Yahoo's youth appeal .

"She will instantly gain a social-media site that has become a hub of communication and blogging for millions of people, " said the WSJ.

Until now Tumblr Chief Executive David Karp has concentrated on building his user base, leaving till later the question of earning money, said the Journal, adding " It is a pattern typical for young Internet companies."

Karp once told the Los Angeles Times that he was "pretty opposed to advertising" but last year Tumblr began taking ads on its service .

reportedly generating a modest $13 million in 2012.

Yahoo is said to believe it could help Tumblr selling far more ads, boosting its own revenue in the process.

In March, Tumblr had t 117 million unique users world-wide, up from about 58 million a year earlier, according to comScore. On smartphones, Tumblr had almost 12 million unique visitors, up from about four million a year earlier, comScore said.

Yahoo CEO Mayer, who joined the company last summer, has long been expected to make acquisitions part of the strategy. Until now she has bought small companies. She became interested in Tumblr a couple of months ago.

Tumblr was founded in 2007, by Karp, then 21. Within a fortnight it had 75,000 users; by January 2012, there were 42m blogs on the site; today, there are around 110m. Investors who have poured $125m into the company reportedly include Sir Richard Branson.

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