Yahoo announced today that they will acquire our portfolio company Tumblr.
In September of 2007 we, together with Spark Capital, invested in a 3 person start-up founded by David Karp, a 21 year old coder who had not finished high school. At the time, our biggest challenge was convincing David to drop the four other projects he was working on to focus on Tumblr. Once he did, he quickly built one of the world's greatest platforms for self expression. Over the last five years, Tumblr became much more than that.
Today we, as users, are all overwhelmed by the amount of content available on the Internet. It is no longer enough to know what we are searching for. More and more, we need a way to discover things we did not know we were looking for. Tumblr is one of the best, if not the best platform for discovering new ideas and inspiration on the Internet. It does this by combining creation, consumption and curation in a way that remains completely unique.
David's intuitive genius for the medium built an enormous network of highly engaged users. Tumblr now has an opportunity to be the future of entertainment media, in much the same way Twitter can be the future of news. Tumblr was well on its way to becoming a large and important company, but the hard work of building a business around this huge network remained in front of us. When Yahoo expressed serious interest in Tumblr, David saw an opportunity to combine his ability to create a compelling user experience with Marissa Mayer's experience building businesses to Internet scale. Perhaps most importantly Marissa promised Yahoo "won't screw it up". http://bit.ly/18Y7rfy
Yahoo's acquisition of Tumblr is a very smart strategic move that will bring a new audience to Yahoo and create a real opportunity for them to balance the market power of Google and Facebook. That will be good for Yahoo and Tumblr, but it will also be good for the market broadly.