When news of Yahoo purchasing Tumblr came out yesterday, a number of Tumblr users expressed their concern for what was going to happen to their favorite blogging service. Yahoo’s CEO Marissa Mayer took to announce one thing during a company conference call today that you can expect to see change with Tumblr. More Ads. (Yay!)
For Yahoo to make the Tumblr acquisition worthwhile, it’s going to have to greatly increase revenue. Tumblr generated just $13 million in revenue last year, while using barely any ads at all. Yahoo, however, has a goal of increasing this with the help of ads to a revenue of $100 million in 2013. Tumblr’s CEO David Karp has always been hesitant when it comes to traditional advertising, although he says that now the site understands its users enough to embrace a more standard advertising format.
Mayer had a few examples to give on how advertising may be implemented on Tumblr:
On Tumblr, there’s a number of different places where we think we can monetize in a way that is meaningful and really addititive to the user experience.
For example, Tumblr has what’s called the “dashboard”, which is their version of the newsfeed — or in old school terms, an “inbox” for the blogs you follow. So basically different bloggers that you follow can all appear there in your feed.
And today, Tumblr already does some advertising, though minimal, in that feed. We would like to look at them and understand how we could introduce ads — in a very light ad load — where the impact is really created, because the ads really fit the users’ expectations and follow the form and function of the dashboard.
We also see some opportunities to possibly work with bloggers who want ads, to provide ads on their Websites. That would always be done with the blogger’s permission.
While this sounds exactly like what Tumblr users were dreading when they first heard of the deal, it’s likely that this is the path Tumblr was going to take regardless of whether it was sold or not. Tumblr is, after all, a free service and it is always looking to maximize revenue in anyway possible. Unfortunately for Yahoo, it’s going to come out looking like the bad guy, completely changing the service for the worse.