New Term: “Tumblr Money” (and How Can I Get Me Some of That?)

Posted: April 20th, 2010 | Author: Laura Rich | Filed under: Uncategorized | No Comments »

Tumblr_on_blue_large This week, Tumblr, the "light" blog-posting service, closed a $5 million C round of funding from previous investors Union Square Ventures and Spark Capital. As Peter Kafka rightly pointed out on MediaMemo, investors don't usually go back in for more unless there has been a demonstrative change (for the positive) in the company's financials – maybe even just revenue growth or an acquisition or new partnership that has a clear path to income.

But Tumblr, as both Gawker and MediaMemo mockingly note, really doesn't have much going in the way of a revenue model, and never has:

Three-year-old Tumblr doesn’t charge its 4.5 million users for the
service. It doesn’t sell advertising on the page views they generate. [MediaMemo]

The company, which is featured on the cover of this week's New York magazine, has just recently said it will start looking to earn money from micropayments by its blog users. Things like virtual goods, and a marketplace for Web designers to sell themes to other Tumblr users.

Kafka was generous to compare the strategy to Zynga, maker of the hated and stupidly profitable Facebook games Mafia Wars and Farmville, and the L.A. Times Tech blog also generously referred to Tumblr’s plans mildly as “off-the-wall” and went on to compare Tumblr to Twitter.

But the bottom line is: The no-revenue-model plan is not dead. (Long live the no-revenue-model plan.) If you can get an audience and a lot of buzz, you can get investors. You built it; they came; and the investors followed. See Google, Facebook, Twitter. And now Tumblr. The only difference with Tumblr is that it doesn't have nearly the scale the other guys do, so a revenue model is almost a moot argument for now. How much can you monetize on a user base of 4.5 million?

All this said, I do fully expect, considering Tumblr's social approach to blogs, that we'll see more interesting stuff coming out of the company. Eventually. And perhaps on a Twitter pace (remember it took four years to get to the point of carrying ads, er, "sponsored tweets").

For now, considering money's being raised on no revenue model and a relatively speaking small user base, let's call it "Tumblr money." It's a version of "dumb money," but more specific, and more Web 3.0. And I think we all deserve to get our hands on some "Tumblr money."