David Karp, the 26-year-old founder of blogging site Tumblr, has just made to make a lot of money – almost in spite of himself.
Yahoo’s board of directors agreed on Sunday to buy his wildly popular blogging platform, which boasts 100million users and 90million posts per day, for $1.1billion cash.
The deal could make the native New Yorker the latest 20-something tech billionaire, even though he was publicly opposed, even just last year, to selling the company he founded out of his mother’s small Manhattan apartment in 2007.
On Sunday afternoon, it was revealed Yahoo’s board approved the purchase of Tumblr, despite its revenue of only $13million last year. Even that figure was only made possible after $125million in capital investments.
Tumblr, which is a mico-blogging platform for quickly posting pictures, text and video, also functions as a social media site.
Its platform manages to blend elements of all of the major social networking sites. Sharing and posting photos and simple and easy, like Instagram. Gifs moving images, pictures, and videos are all easy to share. But, users follow other Tumblr blogs and compile news feeds, making the site similar to Facebook and Twitter.
The easy, simple layout of Tumblr blogs has spawned diverse, quirky, blogs. An enormously popular Tumblr called ‘#whatshouldwecallme’ features a series of animated gifs explaining the reactions to daily life of a 20-something woman.
However, celebrities like Joe Jonas and Lady GaGa also have popular Tumblr pages and companies like the shoemaker Col Haan use the site as a creative way to market their products.
Tumblr is also popular with many pornstars and features numerous sexually-explicit blogs.
Tumblr boasts remarkable loyalty among its users. Some 85percent of Tumblr users make 20 or more posts a month.
However, Karp – a high school dropout who taught himself how to code – had expressed grave reservations about giving up his brainchild to a Silicon Valley tech giant.
In a 2012 interview with the Guardian, he said he had been swatting away buy-out requests for years.
‘Particularly in the first three years, there were a lot of (mergers and acquisitions) people who would pull you aside and you’d think “Well, s***, I could be a pretty rich 23-year-old with very little effort,”‘ he said.
‘We stuck it out. I won’t say I really knew why.’
Perhaps the perseverance makes sense to Karp now that he is ‘very rich’ at age 26.
The deal conjures images of another young man who is very rich – Facebook founder Mark Zuckerberg.
At $1.1billion, Tumblr’s worth is nowhere near the value of $100billion Facebook, but 29-year-old Zuckerberg’s success has become something of a pattern for young, brilliant tech entrepreneurs.
It is unclear how large a stake in the company Karp maintained before the Yahoo deal.
In 2008, he sold a 25percent stake to investors for $750,000.
The investor share of the company was $125million at the time of the deal, according to AllThingsD.
Karp grew up on Manhattan’s tony Upper West Side, the son of a music composer father who wrote songs for films and TV shows and a mother who was a teacher.
He taught himself how to code HTML at age 11 and began setting up his own consulting business shortly thereafter. His parents allowed him to drop out of high school at age 15 and complete the remainder of his education by homeschooling.
At age 17, he moved to Japan, where he cemented his skill as a programmer and began pitching his ideas to tech companies.
He moved back to New York and sold his services as a consultant. He founded Tumblr in 2007 at age 21 – and it quickly consumed all of his time.
He started up an office in Manhattan and has ardently resisted the lure of moving to Silicon Valley. He also tried to resist the money that the tech world had to offer.
He told the Guardian that he wanted to remain independent – believing he could grow the company by growing ad revenue naturally.
Within a year, though, he was accepting funds from venture capital investors.
He currently lives with his girlfriend in a modest apartment in Manhattan’s West Village. Rachel Eakley is a chef and a graduate student studying psychology.