David Karp opens up about why he sold Tumblr to Yahoo

Yahoo has a legacy and is "doing the exactly the same kind stuff we're hinging our business on"

As you may have heard, last week Yahoo agreed to buy Tumblr for $1.1 billion, a move that surprised many. Even Tumblr's own CEO, it seems. 

"I was not expecting to sell the company this year. I certainly wasn't looking to sell the company," Tumblr CEO David Karp said in an interview with Charlie Rose, which aired Thursday night, in which he revealed why he decided to go ahead with the deal, 

"This was a really, really remarkable opportunity that presented itself."

Calling Yahoo CEO Marissa Mayer a "visionary" and "one of the most capable leaders" in tech, Karp said that the two companies were talking about working together all the way back in November of last year.

"We knew after those first few conversations that we were really excited about working together," he said, and that "there was a lot we were going to do together, regardless" of whether or not Yahoo actually went ahead and bought Tumblr or not.

So why Yahoo? Because it is "a company with a legacy doing the exactly the same kind stuff we're hinging our business on," said Karp. "They were the original digital media company."

"They're at a place today, Yahoo and Marissa and her team, today, are looking for a future for Yahoo. A path forward and growth for that business. And that's where they saw a huge opportunity to be in this media network that we were building. And what Marissa showed me, what their team showed us, was an opportunity for Yahoo to help us fuel, in a big way, the development of that network and the development of our business."

The Yahoo/Tumblr deal

Yahoo reached a definitive agreement to buy Tumblr for $1.1 billion in cash.Tumblr will remain an independently and separate business from Yahoo, and CEO David Karp will retain his position as well.

Both sides stand to see substantial benefits from the deal.

For Tumblr, it will have access to Yahoo's personalization tech technology and search infrastructure, which will give users more access to content.

And for Yahoo, they will get access to Tumblr's fast growing network. The deal could be a boon for Yahoo, as is expected to grow the company's audience by 50%, to over a billion visitors a month, and to grow Yahoo's traffic by around 20%.

In March of last year, Tumblr passed 20 billion posts, and in April it flew past 50 million blogs. As of March 2013, the site had reached 100 million blogs and over 44 million posts. 

It now has over 50 million posts, more than 300 million monthly unique visitors, 120,000 signups every day, 900 posts per second and 24 billion minutes spent on site each month.

On top of that, Yahoo and Tumblr both have a plan to increase revenue by creating new advertising opportunities.

The deal is expected to close in the latter half of 2013, but Yahoo has already decided to move its official blog to Tumblr.

You can see this portion of the interview below:

(Image source: https://www.bloomberg.com)