Tumblr is one of those blogging platforms that a person can easily lose a couple of hours and not know it. It’s very addicting once you understand how to use all it’s little tricks. Users love how you can reblog content they enjoy onto their blog and share ideas, answer questions, and converse with others but how does Tumblr actually make money if everyone is having fun all the time and not buying anything?
Well, that is what Yahoo, it’s parent company who purchased Tumblr for $1.1 billion dollars a year ago, is trying to figure out right now, including Tumblr itself. How does a company market and advertise to an environment that is so fluid and diverse? Users do not fill out detailed profile information like on facebook so markets are not able to target ads based on personal metrics so the only other way to market would be content that a user posts on their wall, but what if the user just posts random stuff, not only that but how often should these ads appear and where?
That is the challenge facing Tumblr and Yahoo right now since Tumblr has basically been given free rein with Yahoo’s money, now investors want to know when they will get to see a share of profits that many are thinking was too high of a purchase price for a blogging platform. The up side is that the number of users has increased but not the money.