In Yahoo Deal, Tumblr Becomes the Next $1 Billion Startup The blogging platform's 26-year-old founder, David Karp, will stay on as chief executive.

By Jason Fell

When David Karp founded blogging platform Tumblr from his mother's New York City apartment in 2007, he was just 20 years old and had dropped out of high school. Now, at age 26, Karp has sold Tumblr to Yahoo Inc. for approximately $1.1 billion in cash. The companies announced the mega-deal this morning.

Under Yahoo, Tumblr will be independently operated as a standalone business. Karp, meanwhile, will remain on board as chief executive. Following the deal, his net worth is reportedly about $220 million.

"The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators," Yahoo said in its announcement of the deal.

Related: Yahoo Acquires Teen Entrepreneur's News Gathering App, Summly

Some numbers on Tumblr: The popular site hosts some 105 million blogs with more than 300 million monthly unique visitors. It attracts 120,000 new users every day and sees 900 posts per second, the company says.

In the deal, Yahoo is presumably after Tumblr's fast-growing audience and droves of user-generated content. On her own Tumblr page, Yahoo CEO Marissa Mayer said Tumblr could grow Yahoo's audience by 50 percent to more than a billion monthly visitors. She also made a hopeful assertion: "We promise not to screw it up."

Tumblr is the latest in a string of tech startups to be bought for $1 billion or more. Google notably ponied up $1.65 billion in stock for YouTube in 2006. Last summer, Facebook agreed to acquire Instagram for $1 billion. By the time the deal was complete, however, it was valued at about $740 million -- $300 million in cash and the rest in stock.

And Tumblr isn't the only tech startup Yahoo has acquired over the last several months. In March, it bought 17-year-old British developer Nick D'Aloisio's news gathering app Summly. More recently Yahoo gobbled up mobile task-organizing app Astrid, as well as GoPollGo, a real-time social polling tool that lets brands collect and analyze feedback.

Since launching in 2007, Tumblr had completed several funding rounds totaling $125 million. It was backed by several investment groups, including Union Square Ventures, Spark Capital and Sequoia Capital. Last summer, Tumblr was said to be valued at about $800 million.

Yahoo's acquisition of Tumblr is expected to close in the second half of the year, the company said.

Related: Marketing to Teens? What You Need to Know About Tumblr

From 2011, here's Karp on what to consider when scaling a business:

Jason Fell

Entrepreneur Staff

VP, Native Content

Jason Fell is the VP of Native Content, managing the Entrepreneur Partner Studio, which creates dynamic and compelling content for our partners. He previously served as Entrepreneur.com's managing editor and as the technology editor prior to that.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

'I Was Called Crazy': This 27-Year-Old's Side Hustle Hit $30,000 a Month in Under a Year — Now It's Worth Millions

Changing regulations forced Angel Rodriguez's jet ski rental company to shut down, and the young entrepreneur had to figure out his next move — fast.

Operations & Logistics

PPP Forgivable Loans Will be Unforgiving for Many

Business who don't bring back their entire workforce will have their eligible forgiveness amount reduced.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

Chevron Announces Layoffs Affecting Up to 8,000 Workers: 'Stronger Long-Term Competitiveness'

The oil producer said the layoffs are part of a cost-cutting initiative.

Career

Automate Your Job Search and Get More Interviews for Only $40

Perform 50 filtered job searches a month and apply for 300 of them with a custom email.