Another day in the life of the internet, and yet another enormous purchase of a web startup by an established giant: this time, it has been announced that Yahoo is snapping up the blogging outlet Tumblr for around $1.1 billion. The deal recalls Facebook’s purchase of photo site Instagram for $1bn one year ago, and furthers the trend for the big boys to spend lavish sums on new and innovative, third-party firms. It also marks the largest deal by far for Yahoo CEO Marissa Mayer since she took control of the firm in July 2012.

Tumblr is a site that incorporates elements of blogging and social networking, and is hugely popular with a young demographic – many members of which were not even born when Yahoo was founded in 1994. Its simple and elegant design was created by 26-year-old David Karp, who founded the platform in 2007 and resisted not only the urge to relocate from New York to Silicon Valley, but the lure of previous offers to buy him out – although in 2008, he did sell a 25% stake to venture capitalists for $750,000 to aid Tumblr’s growth.

Now, though, comes the quite literal billion-dollar question: can Yahoo, and Karp – who is expected to continue to run Tumblr – make a success of the new arrangement?

Yahoo’s form on this front is not encouraging. Its prior purchase of Flickr led to that platform’s effective demise as the web’s leading photo-sharing site. It all depends whether Yahoo really understands what it has bought: in Flickr’s case, it failed to grasp what made the site so popular and the acquisition was mainly geared to lending Yahoo a cachet of ‘coolness’, as well as access to a readymade audience. However, followers of a site can disappear incredibly quickly if they feel alienated or find a fresher alternative, leaving ghost sites everywhere. MySpace has been the most famous victim of rapid exodus, with Flickr emulating its decline.

A billion-dollar investment also heightens the pressure for financial returns: will Tumblr still be viewed as a cool proposition once the inevitable quest for monetisation begins? It’s a delicate process: Google – as seen in the proliferation of adverts that has blighted its purchase YouTube – and Facebook, with its controversial “promoted posts”, have just about held the line, but not without difficulties in audience relations.

Although undoubtedly excited about his own windfall and the possibilities for growing the site with big-money backing, Karp will at the same time find it hard to no longer be his own boss, and any failure to manage him – the holder of the company’s vision so far – may risk destroying the whole business. Mayer will require some supreme management skills to turn the move into a success, and avoid a repeat of the Flickr disaster. However, as someone who was an employee of Google during the YouTube acquisition, she has experience of a relatively successful buyout. Yahoo’s board will be hoping that she can make this one work, too.

Image of David Karp courtesy of Wikipedia, via the Wikimedia Commons