Tumblr’s Unclear Future Shows That There’s No Money in Internet Culture

Earlier this month as Verizon completed its acquisition, a number of Tumblr employees, as well as those at other Verizon-owned properties, like the Huffington Post, were laid off. This comes at an interesting time for Tumblr, which is increasingly struggling to find a business model. From an article on NYMag: The future of Tumblr is still an open question. The site is enormously popular among the coveted youth crowd — that’s partly why then-CEO Marissa Mayer paid $1 billion for the property in 2013 — but despite a user base near the size of Instagram’s, Tumblr never quite figured out how to make money at the level Facebook has led managers and shareholders to expect. For a long time, its founder and CEO David Karp was publicly against the idea of inserting ads into users’ timelines. (Other experiments in monetization, like premium options, never caught on: It’s tough to generate revenue when your most active user base is too young to have a steady income.) Even once the timeline became open to advertising, it was tough to find clients willing to brave the sometimes-porny waters of the Tumblr Dashboard. Since it joined Yahoo, the site has started displaying low-quality “chum”-style ads in between user posts on the Dashboard. Looked at from a bottom-line perspective, Tumblr is an also-ran like its parent company — a once-hot start-up that has eased into tech-industry irrelevance. […] It is rare, but not at all unprecedented, for a site to reach Tumblr’s size, prominence, and level of influence and still be unable to build a sustainable business. Twitter steers a huge portion of online culture, and has become an essential water cooler and newswire for journalists, tech workers, and otaku Nazis, but still has trouble turning a profit.


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