Big payday in store for Tumblr workers after $1.1billion sale to Yahoo!

 

Tumblr founder David Karp with Yahoo CEO Marrisa Mayer

Tumblr founder David Karp with Yahoo CEO Marrisa Mayer

On Monday, Marissa Mayer officially announced the acquisition of Tumblr by Monday. The move is seen by many as a strategic move by the web giant who are trying to make it into the social media scene after conspicuously missing from the front line for the past few years.

But what does this mean for Tumblr employees?

Money of course. A lot of it.

According to a report by research firm PrivCo, each of the 178 employees at Tumblr are facing a serious pay day after the company was acquired by Yahoo for 1.1 billion dollars, the highest paid acquisition in recent years. Even Facebook didn’t get that high when they spent a billion dollars for Instagram last year.

To begin with, Tumblr founder David Karp will increase his bank balance by more than $250million.

To show that it does pay to be loyal, the popular blog site’s first 10 employees will collect an average of $6.2million each while the first 30 will make about $3.3million. The rest of the employees will take home about $371,000.

Mayer announced that Karp will stay on as CEO of Tumblr and continue to run and develop the site.

Despite a massive user base, Tumblr’s revenue was only $13million last year. Even that figure was only made possible after $125million in capital investments.

Those investors, including New York-based Union Square Ventures and Boston’s Spark Capital, will take in $253million and $154million, respectively, according to Crain’s.

The deal faced almost immediate backlash from Tumblr users, who feared Yahoo!’s ownership would change the character of the site and water down the features that make it successful.

But Mayer sought to allay concerns as she urged users and Yahoo investors to ‘Keep Calm and Carry On’ – a reference to the famous British propaganda poster produced during World War II.

The Tumblr platform manages to blend elements of all of the major social networking sites. Sharing and posting photos is simple and easy, like Instagram. GIFs and videos are all easy to share, as well.

On top of that, the site has a new feed function, allowing users to follow other Tumblr blogs like social media networks Facebook and Twitter.

Tumblr boasts remarkable loyalty among its users. Some 85 per cent of Tumblr users make 20 or more posts a month.

All these could be factors that drove the price to well over a billion dollars.

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