Another tech giant is spending big bucks to purchase another Internet phenom: Microblogging site Tumblr is set to be bought out by Yahoo! (NASDAQ:YHOO) for $1.1 billion, almost all of it cash, Yahoo! announced today, confirming rumors.

Tumblr allows users to post multimedia and other content to a short-form blog. It has more than 300 million monthly unique visitors and 120,000 signups every day and reports seeing 900 posts per second and 24 billion minutes spent on site each month. Yahoo! expects the combination will grow Yahoo!'s audience by 50% to more than a billion monthly visitors, and grow traffic by approximately 20%.

In its  press release, Yahoo! said that "per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO. The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators."

Yahoo! CEO Marissa Mayer was quoted as saying: "On many levels, Tumblr and Yahoo! couldn't be more different, but, at the same time, they couldn't be more complementary. Yahoo is the Internet's original media network. Tumblr is the Internet's fastest-growing media frenzy. Both companies are homes for brands -- established and emerging. And, fundamentally, Tumblr and Yahoo! are both all about users, design, and finding surprise and inspiration amid the everyday."

Karp was quoted in the Yahoo! press release as saying: "Our team isn’t changing. Our roadmap isn't changing. And our mission -- to empower creators to make their best work and get it in front of the audience they deserve -- certainly isn't changing. But we’re elated to have the support of Yahoo! and their team who share our dream to make the Internet the ultimate creative canvas. Tumblr gets better faster with more resources to draw from.”

The transaction is expected to close in the second half of 2013.