Would Yahoo Deal Make Tumblr More Attractive to Brands?
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Like a host of other brands, Yahoo has a millennial problem, and its potential acquisition of Tumblr could be a step toward fixing it. But could new ownership help Tumblr with one of its biggest problems — drawing major advertisers?
The companies are in talks about an alliance, some kind of investment or even an outright purchase of Tumblr by Yahoo, according to reports that began with AllThingsD on Thursday night. For CEO Marissa Mayer’s Yahoo, a deal with Tumblr would check many boxes: social, mobile, content and buzzed-about native ads, which Yahoo recently introduced to its home page.
A deal or sale also makes sense for Tumblr, a six-year-old company that’s raised $125 million to date but just began building out an ad platform last year, with an emphasis on formats that blend with the aesthetic of a platform that’s about beautiful visuals and animated GIFs. Tumblr’s sales team is still small and its products still deemed experimental, though its head of sales, Lee Brown (a 10-year veteran of Yahoo himself), has said that he expects the company to become profitable this year. Yahoo’s relationships with ad agencies and marketers could certainly help Tumblr’s business along.
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