October 22, 2014

$1 Billion Tumblr Deal Turns 26-Year-Old Founder into Mega-Millionaire

tumbler david karp

Have you ever dreamed of becoming a mega-millionaire with your next business idea? It’s a reality for 26-year-old David Karp. The founder of Tumblr, the popular social blogging platform, has become the latest tech tycoon almost overnight.

Today Yahoo officially announced plans to purchase the site Karp started at age 21 out of his mother’s Manhattan apartment. The Daily Mail has Karp’s story as a high school dropout who taught himself HTML. Karp then started his own computer consulting company before launching his incredibly popular platform.

Yahoo’s board of directors recently approved a $1.1 billion cash purchase price for Tumblr, according to a report from AllThingsD.com. In an official announcement, the companies said Tumblr would continue to operate as a separate business with CEO Karp at the helm.

Tumblr, a blogging platform that has following, sharing and other social features, gives Yahoo a stake in the social networking world, The New York Times observes. The platform also provides a source of user-generated content Yahoo management believes the company needs. How Yahoo would integrate Tumblr content into its current model remains to be seen.

Initially, the two companies will work to create advertising opportunities that are “seamless” and “enhance the user experience.” But a joint announcement was not specific about what kinds of advertising opportunities these might be.

Tumblr boasts 300 million monthly unique visitors and 120,000 signups every day, 900 posts per second and 24 billion minutes spent on site each month. The two companies state in their joint release that this makes Tumblr one of the fastest growing media networks in the world.

Even Small Business Trends has a Tumblr presence.

The announcement said the deal is subject to the customary conditions and will close in the second half of the year.

Photo Source: Davids Log

16 Comments ▼

Joshua Sophy - Staff Writer


Joshua Sophy Joshua Sophy is a staff writer for Small Business Trends, covering technology and business news. He is a journalist and editor with 15 years experience in media. A former newspaper reporter and editor, Joshua also serves as President of the Board of Directors of a curling club and is editor of a regional newsletter focused on the sport of curling in the Eastern U.S.

16 Reactions

  1. Uh oh.

    I’m not so sure that the purchase is wise… we have seen what Yahoo! has done to Flickr. How Yahoo! will recoup the purchase price? Ads? ‘Pro’ plan? It’s not working with Flickr…

    Tumblr is cool, but I’m not sure how Yahoo! will benefit from it, as Tumblr will be operated separately…

    Just my 2 cents :)

  2. I’m excited to see Yahoo make a bold move like this. Hoewver, Ivan brings up a good point; how will they monetize it?

    Google is successful because they figure out the monetization (just look at how successful YouTube has been after they purchased it for a seemingly obscene amount).

    Let’s give Marissa & Co. a little time to see how they do with this.

  3. This guy is 1 year younger than me and will now be worth millions of dollars. Hats off to him, will be interesting to see what Yahoo decide to do with Tumblr.

  4. It’s a dream for many entrepreneurs now become a reality for Karp. And it’s a good lesson in perseverance and in following your own instincts no matter what. Thanks to Josh, for reporting on this awesome story, and to Shawn, for sharing this post with the BizSugar community.

  5. Congrats to David Karp and thanks to Joshua for sharing this story. I have the same questions as Ivan and Robert about the monetization of the deal. If Yahoo! would implement smart ad options similar to InfluAds and BlogAds, that could turn out in a good way for Tumblrs’ users and readers.

    I have been a Tumblr user for a pretty long time and I am using the platform for some of my own domains and niched sites, e.g., NameDayGift, AtlasAnd, and ObjectiveArgentum. Talking about argentum (the Latin word for silver and money), I hope that Mr. Karp will be paid in real money and not in paper money! ;)

  6. Hi Martin,
    For the benefit of both the Small Business Trends and BizSugar communities, could you explain a bit more about what specific benefits you see in Tumblr and how you use the platform for the niches you’ve mentioned here?

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