David Karp, 27-year old founder of Tumblr, is set to earn a bonus of $81 million in addition to his salary if he stays at Yahoo! for the next four years. Tumblr was launched in Feb. 2007 by Karp, a New York City high school drop out and acquired by YAHOO for $1.1 billion in May 2013.
Yahoo Inc is acquiring blogging service Tumblr for $1.1 billion cash.
The deal will use about 1/5 of Yahoo’s $5.4 billion in cash and marketable securities.
“Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business,” Yahoo said in a statement on Monday.
Yahoo CEO Marissa Mayer has been meeting with top Tumblr executives, including Tumblr CEO David Karp. The rumors of a potential acquisition come after Yahoo CFO Ken Goldman spoke at JP Morgan’s Global Technology conference about the need for the company to attract the 18-to-24-year-old demographic in an effort to make Yahoo “cool again.”
Tumblr is a micro-blogging platform that has grown in popularity over recent years, hosting blogs that have gone on to become or create extremely popular memes.
The potential acquisition would be Mayer’s biggest move since becoming Yahoo CEO in July. Since taking the reins, Mayer has revamped the Yahoo homepage along with Yahoo Mail, and spent millions on smaller acquisitions, including a $30 million purchase of Summly, a mobile news app created by a 17-year-old British developer.
The reported $1 billion price tag for Tumblr would be one of the biggest acquisition deals in tech history. By comparison, Facebook bought photo-sharing service Instagram for $1 billion, but due to Facebook’s stock troubles, the final price Facebook paid was $741 million.