Yahoo Buys Tumblr For $1.1 Billion Cash After Tumblr CEO David Karp Said He 'Doesn't Want To Be Absorbed Into A Behemoth Of Another Company' [Gif]

Yahoo bought Tumblr for $1.1 billion in cash as part of a deal announced Monday and Yahoo released a statement they "won't screw it up." The Yahoo - Tumblr deal comes after Tumblr CEO, David Karp, said he "doesn't want to be absorbed into a behemoth of another company."

Yahoo Chief Executive Marissa Mayer is making a big bet on the NYC-based social blogging site, Tumblr, in an effort to revitalize the struggling Yahoo company by bringing in a blogging platform, Tumblr, that's got incredible traffic but little revenue.

Just how Yahoo expects to make money off the purchase, while promising "not to screw it up," is the biggest obstacle facing Yahoo executives.

Yahoo wanted to be clear for fans of the blogging platform that they'll not hinder its sleek design, or by making it more corporate. It appears as if that was part of the sale agreement.

Said Yahoo in a statement about the Tumblr purchase:

"Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business."

Rumors of the deal appeared last week with Facebook and Microsoft said to be also bidding on Tumblr.

Right now, Yahoo only has about $5.4 billion in cash and marketable securities, so the $1.1 billion price tag for Tumblr eat up about a fifth of their overall cash on hand. It's the largest price Mayer has paid since taking over control of Yahoo in July, and it's a move that will attempt to bolster Yahoo's fading business and web traffic.

Analysts believe Yahoo has overpaid for a property that might not be making any revenue at least for a couple years, but most have applauded their attempts to become bigger players in the important social media battles on the web today.

RBC Capital Markets analyst Marh Mahaney told Reuters "[Yahoo's] fundamentals have been subpar for numerous years, in part because of the company's missing presence in Social and Mobile. Tumblr may help [Yahoo] develop that presence."

But Mahaney also said it was a "long-shot long term" investment.

With over 100 million blogs in its network and thousands more added every day, the picture, video and text sharing Tumblr site has attracted a huge following especially among the web's teenage denizens, who marketers and brands crave the most.

With Google Inc. and Facebook Inc, taking a lot of Yahoo's advertising dollars in recent years, it's said the Yahoo purchase of Tumblr will increase Yahoo's audience by 50 percent.

But advertising on Tumblr is pretty non-existent or at least in its inchoate stages as developers try and implement ads without alienating fans of the sleek and uncomplicated "dashboard" style.

The Tumblr dashboard scrolling by here is ad-free:

Despite tens of millions of unique visitors each month, Tumblr is said to have made only $13 million in revenue for the 2012 fiscal year.

Ken Goodman, Yahoo's CFO told Reuters he expects that to grow.

Pivotal Research Group analyst, Brian Wieser, says that loading up Tumblr with banner ads or teaming it with Yahoo's sales team, might not provide the ROI it seeks, and it would alienate users of the site, who have largely mocked attempts to monetize.

"It's not clear that this deal will be favorable from a return-on-capital perspective," Wieser said. "One billion (dollars) for one company is a big bet."

Other deals of this nature include when Facebook bought the popular social media photo site, Instagram for $1 billion last year. In 2006, Google paid $1.6 billion for YouTube. 

Yahoo will also have to address all the pornography that populates Tumblr, with Quantcast estimating that 5 percent of it's traffic is porn-related and NSFW.

Tumblr founder and CEO, David Karp, is said to have made $200 million himself on the deal, but he told the UK's Guardian last year, "There are a lot of rich people in the world. There are very few people who have the privilege of getting to invent things that billions of people use."

The Tumblr $1.1 billion sale to Yahoo just made David Karp a very wealthy man at just 26 years of age, but whether his Tumblr site is changed for the worse after being purchased by Yahoo, remains to be seen.