Yahoo! Inc. (NASDAQ:YHOO) finally revealed all the details of its $1.1 billion Tumblr acquisition in a 10-Q filing with the SEC on Thursday. According to the regulatory filing, the David Karp-led internet blogging service had $16.6 million in cash when Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer acquired it in May. Details of the filing were first pointed out by Peter Kafka of AllThingsD. The acquisition was completed in June.
Yahoo! Inc. (NASDAQ:YHOO) to pay Tumblr’ Karp $81M in retention payment
According to the filing, the purchase included an $81 million payout to Tumblr CEO David Karp. Karp will receive that hefty sum if he remains in his position at Tumblr until June 2017. David Karp, 27, started Tumblr in 2007 after leaving his formal education to focus on computer programming. The retention payment will include $40 million in cash and $41 million in stock. The deal made Karp a multimillionaire.
After the acquisition, Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer assured Tumblr users that she will “not screw it up.” Any major change at Tumblr would risk alienating its users, who mostly consist of young adults and teens. Yahoo! Inc. (NASDAQ:YHOO) is headquartered in Sunnyvale, California. But Mayer has allowed David Karp to run Tumblr from New York.
Yahoo! Inc. (NASDAQ:YHOO) on acquisition spree post Tumblr
Yahoo! Inc. (NASDAQ:YHOO) has made several acquisitions since Marissa Mayer joined the company as its chief executive. Yahoo! Inc. (NASDAQ:YHOO) has spent $1.15 billion in the first half of this year to acquire 10 companies including Tumblr, Stamped, Qwiki, Rondee, Ghostbird, and Summly. Tumblr is the biggest purchase by Marissa Mayer. The former Google Inc. (NASDAQ:GOOG) executive is trying to revive the falling web traffic and revenues of Yahoo! Inc. (NASDAQ:YHOO).
Yahoo! Inc. (NASDAQ:YHOO) also said in the filing that about $751 million of $1.1 billion it paid was goodwill. According to Brian R. Fitzgerald of The Wall Street Journal, Tumblr was valued at $800 million in late 2011 when it last raised money.
Yahoo! Inc. (NASDAQ:YHOO) shares jumped 0.35% to $27.58 at 12:48 PM EDT.