Tumblr Still Struggling to Be a Profitable Business In a report, founder David Karp says the stakes for proving that Tumblr is a great business are 'as high as they've ever been.'

By Jason Fell

After nearly a year under Yahoo's massive corporate umbrella, it appears that popular blogging platform Tumblr is still struggling to find a profitable business model.

In Yahoo's first quarter earnings report, there once again was no mention of revenue from Tumblr. The obvious issue is the lack of advertising revenue. To avoid turning off longtime users who've enjoyed Tumblr's ad-free experience, the site's ad sales team has focused instead on encouraging clients to create their own Tumblr blogs and share content in the form of native advertising. Problem is, these ads don't make Tumblr much money.

"The stakes are as high as they've ever been," Tumblr founder David Karp, 27, said in a recent interview with The New York Times.

As the New York Times article points out, being acquired by a company of Yahoo's size has afforded Tumblr a little wiggle room in its quest for meaningful revenue. How much time it has left is unclear. Lee Brown, Tumblr's head of global advertising sales, declined to say how much revenue the site is making now compared to a year ago.

Related: Tumblr Gets a Security Upgrade

Last May, Yahoo acquired Tumblr for approximately $1.1 billion in cash. As part of the deal, Karp stayed on as chief executive and Tumblr operated as an independent unit within Yahoo.

While Tumblr's revenue is at an apparent standstill, its user base is growing. Since the acquisition last year, Tumblr's audience has grown 22 percent, according to comScore metrics, and its network is made up of some 180 million blogs. And Tumblr's staff has more than doubled under Yahoo, growing to about 220 people, The New York Times says.

Tumblr was founded in 2007. Here's a video of Karp from 2011, discussing how to scale a business:

Related: Yahoo Overpays Tumblr's David Karp By Another $81 Million

Jason Fell

Entrepreneur Staff

VP, Native Content

Jason Fell is the VP of Native Content, managing the Entrepreneur Partner Studio, which creates dynamic and compelling content for our partners. He previously served as Entrepreneur.com's managing editor and as the technology editor prior to that.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

JPMorgan Shuts Down Internal Message Board Comments After Employees React to Return-to-Office Mandate

Employees were given the option to leave comments about the RTO mandate with their first and last names on display — and they did not hold back.

Innovation

4 Ways Market Leaders Use Innovation to Foster Business Growth

Forward-thinkers constantly strive to diversify and streamline their products and services, turning novelties into commodities desired by many.

Leadership

From Elite Athletes to Tech Titans — Discover the Surprising $100-Million Habit That Leads to Extraordinary Success

Success comes from mastering focus, eliminating distractions and prioritizing what truly matters.

Business News

'I Want the Best People on Our Teams': Meta Is Laying Off More Than 3,000, CEO Mark Zuckerberg Calls for 'Extensive Performance-Based Cuts' — Read the Memo

In an internal memo shared on Tuesday, Zuckerberg said it's "going to be an intense year" at the company.

Branding

Beware the Brand Imitation Trap — Why Copying Giants Like Nike Could Kill Your Startup

Many brands today fall into the imitation trap, thinking that copying successful brands will bring them the same success.

Business News

The FTC Is Readying a Case Against the Largest U.S. Apartment Landlord. Here's Why.

The issue is with fees that allegedly weren't disclosed in advertisements for rental units.