Yahoo pays $81 million to keep Tumblr’s David Karp onboard for 4 years


Tumblr founder and now Yahoo employee, David Karp, will receive an additional US$81-million in cash and stock if he sticks it out on the purple roller coaster for four years — yes, that’s over and above his US$250-million salary.

This information was revealed today in a regulatory filing in which Yahoo also explained how it arrived at Tumblr’s US$990-million valuation — if you were wondering, since Tumblr only made about US$14-million in 2012, most of its price tag, US$751-million, was attributed to goodwill, a type of hazy estimation of what Tumblr’s community could mean in monetary terms to Mayer’s company.

So, why the additional $US81-million? Karp hasn’t worked for a boss since 2006. It would look bad if Karp, who has an entrepreneurial spirit, left his recently acquired company to start something new. The theory is that $US81-million was what it took to soothe Karp’s itch.

Triggered by the Tumblroo marriage, the blogging site’s community became skittish, subsequently leading to blogger asylum seekers who feared that Yahoo would screw things up. With Karp still on board, Tumblr has a better chance of keeping its faithful happy, but will Karp and Mayer’s objectives for Tumblr co-exist in harmony or did Tumblr sell its soul?

Photo: Digitas Photos



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