Yahoo's recently completed acquisition
of Internet blogging service Tumblr
includes a $110 million payment to
Tumblr founder David Karp as long as
he remains on the job for the next
four years.
The retention payment disclosed in a
regulatory filing Thursday is part of
the windfall that Karp and Tumblr
investors realized by agreeing to sell
the service for $1.1 billion in May.
Karp turned 27 last month. He started
Tumblr in 2007, a few years after he
dropped out of high school in New York
to concentrate on computer
programming.
Yahoo Inc. CEO Marissa Mayer has
pledged not to make any dramatic
changes at Tumblr in hopes that the
acquisition won't alienate the blogging
service's existing users, which includes a
substantial number of teenagers and
young adults.
As part of her promise "to not screw it
up," Mayer is allowing Karp to run
Tumblr independently in New York.
Yahoo is based in Sunnyvale, Calif.
Karp is believed to own a 20 to 25
percent stake in Tumblr, which means
he probably has already received a
windfall, which hasn't been disclosed,
from the sale to Yahoo. But he must
stay at Tumblr until June 2017 under
the provision disclosed Thursday to get
the $110 million retention payment.
The payment will consist of $70 million
in stock and options and $40 million in
cash, according to Yahoo's filing.
The documents also disclosed that
Yahoo paid a total of $44 million to buy
six other companies during the three
months ending in June. All told, Yahoo
paid about $1.15 billion to buy 10
companies, including Tumblr, during the
first half of the year.
Yahoo has bought several other
startups since the end of June. The
prices for those deals are likely to be
disclosed in another regulatory filing in
October and November
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