‘Why Yahoo Might Pay $1.1 Billion For Tumblr Even Though It Only Has $13 Million In Revenue’ – Business Insider

The latest article on Business Insider is titled “Why Yahoo Might Pay $1.1 Billion For Tumblr Even Though It Only Has $13 Million In Revenue”.

Jim Edwards says, “If Yahoo! buys Tumblr for $1.1 billion — a deal that may get approved as soon as Sunday night according to AllThingsD — one fact is likely to get cited a lot when the acquisition is announced: That Tumblr had only $13 million in revenue in 2012, after taking $125 million in investor funding.

With lousy economics like that, why would Yahoo even consider such a high price?

It’s worth comparing a putative Yahoo-Tumblr deal to Facebook‘s $1 billion acquisition of Instagram last year. And not simply because the headline price is the similar.

Why Yahoo Might Pay $1.1 Billion For Tumblr Even Though It Only Has $13 Million In Revenue

Business Insider