The timing of AllThingD's report is perfect. Yahoo! has a press event scheduled for Monday afternoon. Seems like convenient timing, no? As if Yahoo! is so confident this deal is already done that they're announcing the press conference a whole weekend in advance.

But that's not how business acquisitions work. They're rarely clean. Acquisitions are cut throat and underhanded and nothing is official until the papers are signed. And these negotiations are playing out a little bit too much in the press. So, on that note, TechCrunch reports Tumblr sees Yahoo!'s billion dollar offer as "too low" and "only a first offer." And Tumblr's booming business success and financial reports showing off the charts revenues and profits certainly give it that right. Oh, wait, no. Tumblr only made $13 million in 2012 and that hype about hitting $100 million by the end of this year isn't lining up with reality. TechCrunch says they're going to run out of money soon if they can't find a sugar daddy soon:

Tumblr employees have been told that the company only has enough funds to operate for a few more months, as its costs far exceed the limited revenue it earns. Tumblr pulled in $13 million in 2012, but has accelerated its advertising offering in hopes of hitting $100 million in revenue this year. The money’s not coming in fast enough to support its expenses though. Employees were recently told not to be concerned, though, because the company is expecting to be bought.

Tumblr sources saying, anonymously, that Yahoo!'s offer it too low when they're running out of money and their only hope is for a benevolent benefactor to swoop in and purchase them is something to behold. So things are already messy and being negotiated in public. That usually leads into a great working relationship, right?

To say there are cynics out there who think this is going to blow up and be a disaster for both sides is an understatement. But it's mostly going to be a disaster for Yahoo! and Marissa Mayer because they're the ones dumb enough to pay $1 billion for a company that only generated one percent of that in revenue last year. CNET's Dan Farber thinks this could be go down as poorly in the history books as Fox's deal to buy Myspace:

Of course, there is a big risk in spending a billion on a blogging platform that essentially competes with Facebook and Twitter. Yahoo's board has a good reference point for considering the Tumblr downside. In 2005 Fox bought the fast-growing social network MySpace for $580 million. Then Facebook came along, and six years later Fox unloaded MySpace for $35 million. Yahoo isn't Fox, where MySpace was an island in a sea of mostly unrelated news properties.

And there's also the huge financial blow Yahoo! absorbs for paying such a high price as explained by Business Insider's Henry Blodget:

The $1.1 billion purchase price, meanwhile, will vaporize more than a third of Yahoo's cash balance, which will presumably leave some at the company wondering whether Yahoo should have spent so much money buying back its stock over the last couple of quarters.

The Tumblr deal would put Yahoo! in a stick situation. They would have to reign in the purchasing for a while. It would also limit them from doing investor friendly things like buying back shares or producing dividends. If their stock price takes a dive after the Tumblr deal that could pose major problems. But they would also still have around $2 billion to play with. That's still a lot of money.