Saturday, May 18, 2013
By the end of this weekend, Tumblr founder David Karp will most likely be $250 million richer and Yahoo YHOO -0.26% founder Marissa Mayer will be able to say she outmaneuvered her old friends at Google GOOG +0.52%, not to mention Facebook FB +0.38%, Twitter and Microsoft MSFT +2.29%.
Yahoo’s board will meet Sunday to vote on a $1.1 billion offer the company has put forth for Tumblr, the six-year-old social blogging platform. Details of the offer were first reported by All Things D; I’ve independently confirmed them with sources close to the proceedings and learned a few additional facts.
The meeting had to happen fast because an agreement that gives Yahoo the exclusive right to negotiate one-on-one with Tumblr is set to expire in just a few days. Were that window to close without a deal, the Tumblr derby could turn into a real free-for all.
In addition to Facebook and Microsoft, two companies that I reported earlier have held talks with Tumblr, I’ve also learned that Google and Twitter have made approaches in recent weeks. In fact, it was an expression of interest from Google, which was looking to possibly make an investment in or acquire the company, that set off the furious round of tire- kicking that culminated in Yahoo’s bid.
While there’s been some speculation that another party could still emerge with a better offer, it’s pretty unlikely at this point. Tumblr’s board, which includes representatives from Union Square Ventures, Spark Capital and Sequoia Capital, has already voted to approve Yahoo’s offer. Given Yahoo’s large war chest from the sale of its Alibaba stake and the relatively free hand Mayer enjoys as a new CEO, it’s expected that her board will go along willingly as well.
For a third party to derail the deal, then, would require an extraordinarily aggressive gesture, on the order of Mark Zuckerberg calling up Karp and promising him hundreds of millions more. No one’s expecting that. Inside Tumblr, the thinking is that Yahoo’s offer is likely to be as good as it gets because none of other big players need what Tumblr offers — its youth, its growth, its high levels of mobile engagement — quite so badly.
On Friday afternoon, Tumblr had its regular weekly all-hands meeting at its Manhattan headquarters. Naturally, someone asked Karp about the sale reports. Karp — who is believed to own more than 20% of Tumblr’s equity — downplayed them, promising employees that they would be the first to know any big news.
(Source by: FORBES.COM )