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Yahoo reportedly eyeing Tumblr for possible $1 billion acquisition

Yahoo reportedly eyeing Tumblr for possible $1 billion acquisition

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Is Yahoo trying to acquire Tumblr? Earlier today, All Things D reported that the two companies were in "serious" talks about some kind of deal, and now Adweek is saying that Yahoo is looking to do a straight-up acquisition. The deal could reach as high as $1 billion, say Adweek’s sources, putting it in the same league as Facebook’s acquisition of Instagram last year.

Yahoo has been working to capture younger users — the same 18- to 24-year-olds that make up Tumblr’s core user base. Yahoo CFO Ken Goldman recently noted that one of the company’s challenges has been its aging demographic, writes All Things D.

Since taking control of Yahoo, CEO Marissa Mayer has pursued a string of acquisitions, including Summly, Astrid, Jybe, and others. In addition to the failed Dailymotion acquisition, the company has also been rumored to be looking at Hulu, although Mayer has previously said that the company is shopping for smaller targets valued in the $100 million range.

But if younger users are what Yahoo is after, it’s hard to picture a better target than Tumblr. Adweek notes that the deal could also be just what the microblogging service is looking for, pointing to investors’ hopes for a big cashout, and Yahoo’s huge ad sales team, which could help Tumblr scale up revenues.