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Assuming you want to keep Tumblr running, you are also buying the ~200 employees and the costs of running the site. Assuming the 200 employees cost $100k each (salary + benefits) and you are already at $20M in costs.

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If I bought Tumblr in a $3 million fire sale, I don't think I'd keep 200 employees on the payroll, but yes, it combined with the tax write-off and infrastructure costs it's reasonable for Yahoo to want to dump it as fast as possible—they could easily be losing $5M a month on it. I'm just shocked there aren't more opportunists in the market that would have bid the price up to at least something resembling reasonable. That being said, even an extremely well-executed turn-around could be 6 months until break-even, which would require potentially upfront $30 million in losses, in which context the sale price is insignificant, and so the question becomes who has web business expertise + $30 million in cash to burn and desire to confidently make a $15-20 million annual profit business a year or two out. Apparently, not many people/companies.

He specifically said they’d continue to employ all of them.

> If I bought Tumblr in a $3 million fire sale, I don't think I'd keep 200 employees on the payroll

Keeping most of the 200 employees on payroll may have been a condition of the $3m sale price.

Such a condition would definitely explain the price—although that would still be a pretty surprising condition.

> it's reasonable for Yahoo to want to dump it

Verizon, not Yahoo.

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