Yahoo!: Tumblr Has A Really Good Thing Going

Tickers in this article: YHOO

NEWPORT BEACH, CALIF. (TheStreet) -- Yahoo!'s acquisition of Tumblr is not just about the audience, it's about the possibilities for the two companies, Yahoo! CEO Marissa Mayer said during a CNBC interview.

"Tumblr has a really good thing going," Mayer said during the interview. "We don't want to mess that up." She noted that Tumblr, which was purchased for $1.1 billion, mostly in cash, will operate independently, save for certain functions. These include search, discovery, and pulling some of Tumblr's content into Yahoo! properties. Mayer noted that Tumblr has strengths where Yahoo! does not, most notably in food, fashion and art.

Not only is the New York-based Tumblr strong in key content areas, it also brings some technological advantages. Tumblr is strong on mobile, whereas Yahoo! is still lagging on that front, a point Mayer has made ad nauseam.

By acquiring Tumblr, which is experiencing incredible growth, Yahoo! has expanded its audience to over 1 billion users a month. Tumblr CEO David Karp, who was also part of the interview, noted that Tumblr has over 105 million blogs, and is seeing more than 900 posts per second. By marrying Tumblr's incredible growth with Yahoo!'s ad sales technology (Mayer noted that Tumblr has a nascent idea when it comes to ad sales), the potential is explosive for both companies.

By remaining independent, Tumblr will be allowed to continue in hyper-growth mode, and Mayer cited similar scenarios that have worked out. Google's purchase of YouTube and eBay's purchase of PayPal are two of the most prescient examples. "We bought a growth opportunity and we can help Tumblr execute on that,"Mayer said.

Yahoo! shares were higher in Tuesday trading, up 1.47% to $26.97.

--Written by Chris Ciaccia in Newport, Calif.

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