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After a few days of speculation, Yahoo! has officially announced that it will be acquiring tumblr, for $1.1 in cash. There's a notice put up on tumblr, featuring a letter from Yahoo! CEO - Marissa Mayer. She assures users of tumblr that Yahoo! is not going to tinker with the company, and that it will remain independent. All that Yahoo! wants is the bragging rights Okay, Yahoo! claims that tumblr can boost its traffic by over 20%. That's huge. Now, what's interesting about this news is the fact that Yahoo! has only around $1.2 billion in hand (although the company does have assets valuing more than $17 billion). Although I have not looked deeply into the figures, it is rather interesting that the company is investing so much of money when...it doesn't have much money left! No wait, what's really interesting about this news is that a lot of tumblr users are angry about the acquisition! They believe that Yahoo! will end up ruining the tumblr experience for everyone. This is the same sort of angry reaction that surfaced when facebook acquired Instagram for $1 billion a year ago. Yet today, Instagram actually has seen a growth in the number of users, and continues to remain largely independent. So will tumblr also see similar growth patterns, or will the threat of an exodus be real this time? Only time will tell. The deal between the two companies will be finalised in the second half of this year. I had a tumblr account for a very short period of time, in its early days. Although the community idea is fun, nothing beats the pleasure of staying in hosting your own website and staying in control all the time! It would be nice if this fresh cashflow allows tumblr to introduce and support (by connecting the blogs to the community) self-hosted blogs. Now that would be a really hot piece of news.