Couldn't miss it.

Chief Yahoo Marissa Mayer looked pretty damn chipper as she took the stage in a small room overlooking Times Square, late yesterday afternoon.

Technically, the press had gathered for the announcement of a revamped Flickr. (It's biggr! It's spectaculr!) An entire lounge had been papered over with giant images pulled from the service, and in the square below a mob of T-shirt-wearing fans/paid actors were jumping up and down and hollering and waving Flickr signs in celebration.

But with David Karp slouched in the front row, it was clear this was about more than the addition of full-bleed photos to a decade-old service. 

Coach Mike Bloomberg turned up, of course. How could he miss the party for a billion-dollar consumer-web exit? He entered to "Empire State of Mind" and broke out the pom-poms: "This really is very exciting news, not just for Tumblr and Yahoo but also for New York City, because it helps show what a player New York City has become in the tech industry."

He also welcomed the announcement of Yahoo's new New York presence, harkening back to the bad old days: "Twenty years ago if you looked out the window, there were plenty of yahoos in Times Square. But now the Yahoos here will make an honest living." Only a few months left to nail down that legacy.

Skeptical tech journalists took the opportunity to ask how, exactly, Ms. Mayer plans to ensure that Tumblr doesn't turn into another one of Yahoo's many, many bungled acquisitions. "I think that the big piece here is all companies come down to people. David and I have a very clear understanding," she said, adding, "We have an all-new executive management team so everyone has the benefit of history." Time will tell!

After she'd brought the presser to a close--more "Empire State of Mind" playing--a smiling Ms. Mayer approached the hoodie-clad Mr. Karp, who slouched, hands in pockets, next to a caftan-wearing blonde. "Is this your mom?" Ms. Mayer asked.

The answer must've been yes, because the older woman promptly pulled the CEO of Yahoo into an immense hug.

Good Morning Mayer. (Photo: Mediaite)

You could wrap yourself in a grey hoodie, but there's no way to avoid the David Karp-Marissa Mayer PR charm offensive. Taking a breaking from reading US Weekly to moms, ABC News' Good Morning America had the pair on earlier today to discuss their "match made in digital heaven." Anchor George Stephanopoulos breathlessly proclaimed the $1.1 billion deal "could change" the way we use the Internet and labeled Mr. Karp as a "hipster high school dropout" before introducing them for an in-studio interview.

Mr. Stephanopoulos began the segment with a topical question for the Yahoo! CEO about the "power of social media" (like Tumblr!) and how people share the fury of natural disasters on such sites. To which, Mrs. Mayer acknowledged that people in the tornado's path are "uploading photos and sharing their experiences on what it's like to be there," as Mr. Karp looked on.

Now that that obligatory question was out of the way, Mr. Stephanopoulos asked Mrs. Mayer how the Tumblr purchase wasn't going to be a colossal failure, like every other website it has purchased. She responded with what might a solid nominee for the buzz phrase of 2013 award: Tumblr's “community of creators” are at the heart of the deal, she said, adding that the company will remain hands-off.

About two minutes in, we finally heard from Mr. Karp regarding the $.1. billion question: How the hell is it going to make money?

"The state of advertising on the Web has always been uninspiring to us," said hipster Mr. Karp, adding that there's a lot of "good" advertising that exists "out there in the world," like those fancy ads in Vogue. "Yahoo is the original digital media company and is the perfect partner to help us do that."

This is truly a match made in digital heaven. Sadly, we didn't see Mr. Karp and Mrs. Mayer cook up some of Gail Simmons' outrageous pretzel bars.

Probably not the key to a new castle on the moon. (via)

In Pride and Prejudice, before achieving her happy ending with Mr. Darcy, Lizzie Bennett receives a marriage proposal from Mr. Collins, a toadying little man who offers a lifetime of a) stability and b) teeth-grinding annoyance. She turns him down, and her friend Charlotte promptly snaps him up. A 27-year-old woman of limited means in 18th century England, she's realistic about her options and grabs her best bet with both hands.

Let's not kid ourselves that Yahoo! is anything other than a Mr. Collins.

In many ways, Tumblr has made an advantageous and, yes, lucrative match. It's probably the biggest, splashiest exit since DoubleClick's $3.1 billion sale to Google. On Tumblr's end, investors exit nicely, David Karp has enough dough to buy any motorcycle sidecar that catches his eye, and everyone involved avoids a white-knuckled ride toward the end of the company's runway.

For Yahoo--naked breasts notwithstanding--it's a great way to purchase a whole bunch of young eyeballs and mobile users. Besides, if you've ever stumbled onto a Yahoo Answers thread, it's pretty clear their content can only improve.

But this isn't exactly a cake-and-confetti ending, either. Tumblr was reportedly running out of money, and it turns out the money wasn't coming in as fast as everyone thought, either. A source told Valleywag Tumblr's revenue for 2012, largely reported as $13 million, was actually less than $5 million, and Tumblr's Q1 revenues weren't where they needed to be to hit that $100 million end of year target. The company had just lost a string of execs.

According to TechCrunch, many at Tumblr felt $1.1 billion was just a first offer. Instagram, a less mature company, sold for a billion (though much of it was in stock, which reduced the ultimate price tag). AllThingsD says there weren't even competing deals--there's no Jack Dorsey pouting over how this played out.

Thinking along these lines, it seems Tumblr was less a success--wouldn't real success mean finding a way to monetize the business without hand-holding from a Valley behemoth?--and more that the New York City startup was simply lucky to have Yahoo as a willing rescuer. And while Mr. Karp has made a tidy sum, he won't be buying Larry Ellison's share of Lanai any time soon. A few more angels will get their wings, but it's hard to see a whole heavenly host coming out of this deal.

Meanwhile, Yahoo says the social network will remain independently operated, but it's highly likely that Mr. Karp's pretty art project--which he'd said he didn't want to flip for a big payout--will soon have more of the ads he's long resisted. (Anyone hearing early Tumblr investor Jakob Lodwick's dictum that "an acquisition is always a failure" echoing through their brain?) And while Marissa Mayer's made progress toward turning the Titanic, Yahoo has earned its reputation as a startup graveyard. Even if we're not looking at a Flickr or a Geocities scenario, that doesn't make Tumblr a savior for the ailing web giant. There's no guarantee it'll end up as successful an acquisition as YouTube. One analyst dares to compare the deal to AOL's purchase of the Huffington Post. Talk about a loveless marriage.

Well, there's always Etsy!

They made a GIF! You guys love GIFs, right?!

The official announcement just hit the newswires. Yahoo has acquired Tumblr for $1.1 billion, "substantially all of which is payable in cash." Because really, who wants to bet on the stability of Yahoo's stock price?

In the press release, CEO Marissa Mayer tries desperately to explain the acquisition in any way she can besides admitting Yahoo wants to drink the blood of the young: "Yahoo is the Internet's original media network. Tumblr is the Internet's fastest-growing media frenzy. Both companies are homes for brands - established and emerging."

Mr. Karp also chimed in on, as always, the staff blog:

"The work ahead of us remains the same – and we still have a long way to go! – but with more resources to draw from."

He added, "Plus both our logos end with punctuation!"  He also signed the post, "Fuck yeah."

The new stepmom is also already trying to placate wailing, hysterical Tumblr users. From a note just posted to Yahoo's official Tumblr:

We promise not to screw it up.  Tumblr is incredibly special and has a great thing going.  We will operate Tumblr independently.  David Karp will remain CEO.  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.

Let's go live to the Tumblr dashboard to get the reaction:

There's always Medium, maybe?

Tumblr's Mr. Karp (Photo: wikipedia.org)

Here we go, folks! The Wall Street Journal is reporting that Yahoo's board has approved a rumored deal to purchase Tumblr for $1.1 billion in cash money. Forbes reports Tumblr's board, which includes reps from Union Square Ventures, Sequoia Capital and others, has already voted to approve the deal. If it's true that the company has only a few months of runway left, they'd be fools not to.

It's a happy enough ending for Tumblr's investors (and employees lucky enough to have a significant amount of stock), sure, but it's not exactly the stirring success story the New York startup scene might've wished for. (A YouTube's nice, but a Google would be better.) Yahoo's got a long history of snapping up startups and frittering away their potential, and $1.1 billion must dash a few hopes for Silicon Alley's flagship. The company only made $13 million in revenue last year, but as of March it had 117 million unique users worldwide.

Then again, Tumblr last raised at an $800 million valuation.

One also wonders how long Tumblr's enfant terrible CEO will last at a publicly traded company. AllThingsD reports that the deal stipulates he'll stay for at least four years, retaining much of his control over a business unit that operates fairly independently. Place your bets accordingly.

As for you, Yahoo: Enjoy your Homestucks, your social justice cops, your crude porn and yes, your #RHOA GIFs. As one enraged Tumblr user put it, here's what you can probably expect to find when you take over:

He's staring at a large pile of money, shimmering in the distance like an oasis.

Looks like there might be a suitor waiting in the wings for Tumblr, that scatterbrained belle of the ball. He's a real gray-hair, though. According to AllThingsD, the blogging site is talking to Yahoo about the possibilities for an alliance, an investment or even a lock-stock-and-barrel purchase. Ad Week says the highly hypothetical price tag could be as much as a billion dollars.

At this point, it might be easier to keep a list of the startups Yahoo hasn't considered acquiring.

AllThingsD pointed to recent remarks by Yahoo's CFO as a rationale. Basically, the company would do almost anything to shuck its nursing-home aura:

“One of our challenges is we have had an aging demographic,” said Goldman at the Boston event. “Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.”

More than a couple of years, buddy. But if there's one thing Tumblr absolutely can promise, it's hordes of users 18 to 24.

GigaOm suggests, though, that there could be another would-be beau ready to make an offer: "We have heard that Yahoo is worried that Facebook could swoop in at the last minute and beat it to the buzzer." David Karp did turn up at the Facebook Home launch, but the notion is even more speculative than the Yahoo deal, which is far, far from a sure thing.

God knows with these two, though.

Mr. Mohney. (Photo: Twitter)

Remember that poignant note from Tumblr founder David Karp about the elimination of its in-house editorial department Storyboard? You know, the memo in which Mr. Karp supposedly said he “couldn’t be happier” with the team, listed their accomplishments, and, instead of giving them a raise, fired them.

As Valleywag reveals, it turns out that Mr. Karp had Storyboard's then Editor-in-Chief Chris Mohney write the memo about his own firing. Being the wordsmith that he is, Mr. Mohney masterfully and subtly made Tumblr look like the clueless company that it was without Mr. Karp batting an eye. Mr. Mohney asked the higher-ups if he could pen a goodbye note prior to the announcement, and instead was offered something so much better: the opportunity to write Mr. Karp’s farewell note. He told Valleywag:

They asked me to draft the copy, and I was happy to oblige. Since we weren't told any more about the rationale for the shuttering than has been publicly acknowledged  that's how I wrote it. David made some very light edits and posted, and it was received about as well as might be expected.

Valleywag calls the letter the "most poetic exit fuck-you in Internet history." We're sure Mr. Mohney agrees.

Mr. Karp.

Sounds like it's a big day for the little GIF engine that could. Business Insider reports that Tumblr has a board meeting this afternoon. On the agenda: sorting through COO candidates, plus a chat about revenue and maybe even hitting up the VC ATM for more investment.

Business Insider reports there are two final candidates in the running for the position of COO, and board member Roelof Botha is meeting with one of them this morning so the team can discuss. For what it’s worth, Mr. Botha: seems like almost anyone who considers profitability an important metric would be a valuable addition.

As for who the possible COO could be: As  we reported earlier this month, speculation suggests former News Corp. chief digital officer and AOL CEO Jonathan Miller, but the deal he cut upon leaving his last job might put the kibosh on that. Nor was a source who spoke to Betabeat at the time particularly upbeat about the prospects of getting someone to whip the company into shape, calling the search a "sham" and saying, “he’s looking to sideline that whole thing.”

A Sheryl Sandberg-type wouldn't be Mr. Karp's first grown-up counterpart, either. Former president John Maloney was once considered the resident adult, but he bailed a year ago, as Tumblr began its advertising push.

As for what the board meeting'll be like, a source told Business Insider that "meetings between Karp and his directors have grown tense lately, as the West Coast investors who valued Tumblr at close to a billion dollars have flown in, and demanded answers." And Mr. Botha was already spinning: "The team usually walks out of those meetings feeling a little beat up. But your best teachers were probably your hardest teachers."

But Mr. Karp sounds pretty chipper about talking revenue with the board. He told Business Insider:

"The revenue stuff has been most exciting part of Tumblr right now. That's the section of the board updates that get everyone glowing right now."

Apparently eight of Hollywood's top 10 studios are buying Tumblr campaigns. (Guess that L.A. office is getting some use besides offering an excuse to catch some rays!). Oh, and within 24 hours that Gatsby ad/GIF received 140,000 notes, for whatever that's worth.

Got dish? Holler at your gals: tips@betabeat.com.

(Photo: Twitter/successmagazine)

Earlier this week, Tumblr CEO David Karp took the stage at PaidContent Live for a panel called "Tumblr and the Future of Media." It was a poignant title considering that one of the topics discussed was Mr. Karp's recent, rather brusque blog post announcing the end of Storyboard, a high-profile editorial experiment that hired journalists to write features or film documentary video about Tumblr's community of "creators."

For example, this Storyboard piece about a photojournalist documenting a gang truce in El Salvador (on his Tumblr) was published by Mother Jones. One about activists and feminists using nail art (and the growing subculture on Tumblr) was produced in partnership with the Daily Beast.

“We decided it wasn't really the right tool in our tool box," a hoodied Mr. Karp told the conference goers gathered at the Time & Life building. "It was working in some regards. It wasn't working in the ways we intended."

That decision came as a surprise to Storyboard’s editorial staffers. “We were not warned that the department might be shut down,” Chris Mohney, Tumblr’s former editor-in-chief, said by email, in the first interview since he were laid off last week. As was previously reported, former executive editor Jessica Bennett got the bad news just before boarding a plane. Editorial producer Sky Dylan-Robbins declined to comment for this piece.

There was a similar lack of transparency regarding those unrealized intentions Mr. Karp mentioned at PaidContent. “We weren't given any more specifics about what we were doing wrong or right--or not doing at all--than David indicated either in the announcement or in his remarks at the conference,” Mr. Mohney said.

(In our recent report about the growing leadership vaccuum at Tumblr, one source cited Mr. Karp’s “wildly unpredictable and inconsistent” management style as a possible motivation for the executive departures, as well as Mr. Karp's tendency to play favorites.)

When Storyboard launched a year ago, its use of “almost retrograde feature journalism” to promote the Tumblr brand was closely watched by media insiders as a vanguard of a VC-approved way of making original reporting pay, like Facebook Stories, which followed that summer. Storyboard sounded like a more sophisticated version of branded content, which has rushed into the vacuum left by the waning media industry, blurring the line between advertising and editorial.

In Storyboard’s case, the mandate was to cover “Tumblr as if it were a digital city--the ideas, trends and culture coming out of it,” said Ms. Bennett. “I had no problem with that being deemed marketing as long as I was getting to produce the kind of rich, compelling content that I got into this business to do.”

But reporters considering working for brands or tech companies may want to take note. Tipping more towards journalism rather than branding might have been an issue for Storyboard.

“I sort of wonder whether part of the problem was that the content was actually too good,” Ms. Bennett conjectured. “Like, had we taken the simple ‘rah rah Tumblr’ approach, would we still be around? Who knows. But the reality is that we're journalists, not flaks. That's why Tumblr hired us in the first place!”

At the PaidContent conference, however, Mr. Karp seemed to insinuate a different reason for closing Storyboard: the fact that it picked favorites.

“We want to give you the stuff you’re going to love on Tumblr, but we don’t want to say what great stuff on Tumblr is. We don’t want to say what great content is, or these are our favorite blogs. We don’t wan [sic] to color it too much or scare anybody off.”

In response to those comments Mr. Mohney said, “It's worth noting that far more so than Storyboard, Tumblr's Spotlight and Radar have historically been about doing that exact thing. Of course, both those spaces are for sale, unlike Storyboard.”

Was Tumblr worried that Storyboard was encroaching on potential revenue opportunities? “Hah no. Storyboard was never a revenue thing, and never could have been with our resources,” Mr. Mohney said. “What I'm pointing out is that Tumblr has always promoted good content to users through Radar and the Spotlight, and now those two spaces are the things they are selling to advertisers. Make of that what you will.”

Like Ms. Bennett, Mr. Mohney is clearly proud of what Storyboard was able to accomplish, as well as its insistence "that the marketing mission could not compromise the the quality or tone of the editorial we published."

"If you want an example of how that dynamic can tilt toward PR and lose its ability to compel an audience, look no further than Facebook Stories--beautifully produced features that did just a little too much cheerleading for the patron platform, and so read as commercial," Mr. Mohney added. "The main unfortunate similarity between Facebook Stories and Tumblr Storyboard was that both were held at something of a nervous arms' length by their company, for what I suspect were totally different reasons."

Neither project, he explained, was acknowledged or promoted by the parent company. "I'd imagine the segment of Facebook users who knew about Facebook Stories was even smaller than the percentage of Tumblr users who knew about Storyboard," he said. Why Tumblr opted for that route, "only management knows for sure," he said.

Mr. Mohney also had some advice for anyone considering launching this kind of hybrid endeavor. "Make sure, from the start, that there is a clearly expressed purpose in line with the goals of the organization, and that there is sufficient buy-in from the people in charge to see it through to achieving that purpose. We thought we had done so internally--several times--but obviously not."

As for another remark Mr. Karp made during the PaidContent conference, calling profitability "not a metric that is particularly important to [Tumblr]" both Mr. Mohney and Ms. Bennett declined to comment.

Man with the plan? (Photo: Twitter/SuccessMag)

When you're as stylish as Tumblr CEO David Karp, who needs to sweat the small stuff? Case in point: his company’s profitability. During an interview at a conference hosted by paidContent, he informed the audience that Tumblr isn’t making money—but it’s “not a metric that is particularly important to us.”

But don't panic, investors: Mr. Karp added that the company will “absolutely” become profitable, eventually. At some point.

Keeping fugly ads off his pretty, pretty platform is still a top priority for Mr. Karp, though. He took yet another shot at Google's AdSense model, claiming that it "poisoned" the blogosphere. He'd prefer to run "Mad Men quality ads" instead of chasing "little blue links" for chump change.

Mr. Karp also outlined the value proposition for "creators" to stick around and keep creating on the platform. He said that more than 70 book deals and three television deals have come out of blogs based on Tumblr, which is allowing content creators to "prove themselves" to larger media networks.

This being a media conference, there was, naturally, a question about Storyboard's closure. Mr. Karp said "it wasn't the right tool in our toolbox," and the three firings were "not a knock on that team at all." He said that part of Storyboard's problem was that Tumblr was picking favorites: “We don't want to say what great content is. We don't want to say that these are our favorite blogs.”