Big payday in store for Tumblr workers as the first 10 employees get $6.2million EACH after $1.1billion sale to Yahoo!
- Tumblr founder David Karp will make more than $250million in the site's sale to Yahoo!
- The blog site's first 10 employees with collect an average of $6.2million each, while the first 30 will make about $3.3million
- Yahoo! chief executive Marissa Mayer officially announced the acquisition on Monday
By Thomas Durante, Louise Boyle and Michael Zennie
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Each of Tumblr's 178 employees are set to make some serious bank with the website's billion-dollar acquisition by Yahoo!, a new report claims.
Tumblr founder David Karp will fatten his wallet with more than $250million, but he's not the only one taking a massive profit from the deal.
Behind him, the popular blog site's first 10 employees will collect an average of $6.2million each. The first 30 will make about $3.3million, and the rest will take in about $371,000.
Moneymaker: David Karp, who founded Tumblr in
2007 in his mother's Manhattan apartment, sold the site to Yahoo
for this week for $1.1billion - and he will personally take in a total of more than $250million
Buyer: Yahoo! chief executive Marissa Mayer is pictured at a news conference in New York on Monday, where she officially announced the acquisition
The figures, reported by Crain's New York Business on Tuesday, citing data obtained by research firm PrivCo.
On Monday morning, Yahoo! CEO Marissa Mayer publicly announced the purchase with a post on her own Tumblr page - including an animated GIF image that acknowledged the public questions about the acquisition.
Her first words about the deal were: 'We promise not to screw it up.'
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 also 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.
Who is David Karp? Since his company was acquired for $1.1 billion by Yahoo on Sunday, media outlets have been clamoring to know more about the boy genius behind Tumblr
Mayer sought to allay concerns on both sides - and even used an internet meme to make light of the criticism. The GIF she posted reads: 'Yahoo. Tumblr. Now Panic and Freak Out.'
Mayer urged users and Yahoo! investors alike the 'Keep Calm and Carry On' - a reference to the famous British propaganda poster produced during World War II.
Tech news site AllThingsD reports that Mayer, who took over as Yahoo! CEO in July, wanted to quickly snatch up Tumblr as 'the stake in the ground of what her strategy is going forward for Yahoo!'
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.
But, the site also 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.
Mayer cited some of these facts when addressing critics who worried Yahoo! was paying too much for a company that has yet to turn a profit.
Deal: Marissa Mayer and Karp pose for a photo at a press conference in New York on Monday announcing the deal
In her Tumblr post, she wrote: 'The combination of Tumblr+Yahoo! could grow Yahoo!’s audience by 50% to more than a billion monthly visitors, and could grow traffic by approximately 20 per cent.
'In terms of working together, Tumblr can deploy Yahoo!’s personalization technology and search infrastructure to help its users discover creators, bloggers, and content they’ll love.'
She also addressed the fears of Tumblr users, who threatened to leave the service in droves or to otherwise protest the takeover.
'Tumblr is incredibly special and has a great thing going. We will operate Tumblr independently. David Karp will remain CEO,' Mayer wrote.
'The product roadmap, their team, their wit and irreverence will all remain the same as will their mission to empower creators to make their best work and get it in front of the audience they deserve. Yahoo! will help Tumblr get even better, faster.'
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Cannot wait for the day when these buyouts turn out to not be able to make any money after all... Great for investors who get their money now but how do you justify 1.2 billion for an outfit that only makes 13 million after an 125 million investment?!? And no, it';s not like they're getting an entirely fresh databse.
- Bronwen , Eindhoven_NL, Netherlands, 22/5/2013 17:16
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