Yahoo! considers $1bn offer for Tumblr

Yahoo! is in talks to buy Tumblr, a service that hosts 108 million blogs, a person with knowledge of the matter said, a deal that could help the biggest US web portal lure users and advertisers.

Tumblr, founded in 2007 by entrepreneur David Karp, has contacted bigger technology companies seeking to be bought, or form a partnership, according to people with knowledge of the matter, who asked not to be identified because the overtures were private.

Under chief executive officer Marissa Mayer, Yahoo has been adding features designed to win back users who have fled the Web portal in favor of competing sites such as Facebook and Google.

Tumblr got more than 13 billion global page views in the past month, and it recently began letting advertisers pay for prominent placement, putting the company on a path to achieve profitability this year, executives said in March.

Katherine Barna, a spokeswoman for New York-based Tumblr, didn’t respond to multiple requests for comment. DJ Anderson, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment.

Yahoo’s board will meet tomorrow to consider a $1.1 billion all-cash deal to acquire Tumblr, the technology blog AllThingsD reported yesterday. Adweek had reported that the price could be as much as $1 billion. Chief executive since July, Mayer had little to show for her efforts to turn around the company as of last month, when Yahoo reported a drop in its main display-advertising business and issued a sales forecast for this quarter that may fall short of analysts’ estimates.

Mayer’s push to revamp products such as Yahoo’s home page and email have made little headway to reverse a decline in display, an area where Google and Facebook are gaining ground.

– Bloomberg