This week marks a new era for Yahoo and popular blogging service Tumblr. In a $1.1 billion deal on Sunday, Yahoo acquired the site in hopes of planning to shift itself as the technology industry heads towards social media agencies. This deal would exceed the largest acquisition of a social networking company in years, even Facebook’s $1 billion purchase of Instagram in 2012. Yahoo says that it will keep Tumblr as a separate entity, as founder David Karp will be kept on board as CEO.
With this deal, Yahoo will have access to a younger user demographic, as Tumblr’s age bracket is strongest from 18-24. In addition, this age bracket is a fast-growing number of consumers who are in general very engaged with the Internet and social media. Yahoo expects to expand its audience by 50% to more than a billion monthly visitors, and to grow traffic by 20%, through its acquisition of Tumblr.
The biggest question about the deal is how Yahoo and Tumblr will be utilizing advertising and other monetizing services on the site. Although it seems likely that some type of advertising will be used on the site, both Yahoo and Tumblr confirm that advertising opportunities will be created seamlessly to enhance the user’s experience. All in all, Yahoo and Tumblr are a big deal and only time will tell if users will adapt to new changes to make it successful, or if bloggers will jump ship and deem the deal a failure.
As the tech industry moves towards social media motivated ventures, digital marketing agencies can use this towards their advantage. With greater resources from large corporations, many social media outlets that were once small startups can now be more efficient in consolidating searches and information, as well as fixing problems faster and widening the audience.