Is Tumblr On the Auction Block, and Is Yahoo Buying?

AllThingsD broke the news Thursday that Yahoo! Inc. (NASDAQ:YHOO) is trying to reclaim its “cool,”  and if its CEO Marissa Mayer has anything to say about it, it’ll happen via Tumblr. The aging Silicon Valley Internet giant is reportedly in serious talks with Tumblr to acquire the social blogging site, and Mayer may be willing to spend $1 billion to make it happen.

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Yahoo has long been looking for a way to target younger users and challenge its aging demographic, and the New York-based social publishing and sharing platform could be just what the company needs to change its lagging momentum. Gigaom explains that Tumblr boasts that it is the host of  nearly 108 million blogs with over 50 billion posts, with Forbes reporting its $13 million profit in 2012. Tumblr’s hipster blogging status also has allowed it to gain popularity with the “cool, hipster, and creative crowd,” a demographic that Yahoo arguably knows nothing about.

The move also makes sense for Tumblr, which has been working to raise a large funding round that could value it at $1 billion. Unsurprisingly, Mayer is championing the effort, along with her New York-based corporate development team. She has met with the team’s top executives, including founder and CEO David Karp and has made it clear that she is looking to strike a big deal.

However, as with all things, talks can fall apart, and if someone is going to throw a wrench into this plan, rumors are circulating that it could be a certain social media someone known as Mark Zuckerberg.

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Gigaom reported Friday that Yahoo is worried Facebook Inc. (NASDAQ:FB) might steal its deal, as Karp is reported to have a close relationship with the major social networking service. Tumblr’s 18-to-24 year old demographic could be just what Facebook needs, and Zuckerberg has sufficiently proven his salesmanship abilities. However, it remains unknown whether he’d be willing to fork over as much as Mayer might.

Talks are still fluid, but it’s possible a deal could happen as soon as this weekend.

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