Yahoo! is believed to be in acquisition talks with social blogging site Tumblr in a deal estimated to be worth up to US$1bn.
The deal could be just what Yahoo! needs to be relevant in youth markets and, according to AllThingsD, the talks are “serious.”
No deal has yet been struck but the strategic value of such a deal cannot be underestimated. Acquiring Tumblr could give Yahoo! new spectrum for online advertising, not to mention social cachet with the 18-24-year-old market.
The price tag on Tumblr could be as high as US$1bn, based on the company’s valuation in recent funding rounds.
The company has so far raised US$125m in venture capital and is currently valued at around US$800m.
In 2007, David Karp, CEO of Tumblr, and former Tumblr CTO Marco Arment started the company. In its first two weeks, Tumblr notched up more than 75,000 users. Arment left in 2010 to focus on Instapaper.
As of last month, New York-headquartered Tumblr had more than 102m short-form blogs on its network.
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