How do you monetize a publishing platform that's home to more than 50m blogs and 20bn blog posts? If you're the twenty-something CEO of one of the consumer internet's most popular properties, you might consider advertising is "a complete last resort."

That's how Tumblr CEO David Karp described the advertising business model to AdAge less than a week ago, but a week is a long time in the internet economy and a lot can change very quickly.

Perhaps Karp began thinking about how much more Facebook could have been convinced to pay for Instagram if Instagram actually had revenue. Or perhaps he was surprised to learn that internet advertising was a $31bn business last year.

Whatever the case may be, Karp is apparently no longer "pretty opposed to advertising" because yesterday he announced that Tumblr plans to sell advertising on one of the most attractive spots on the site -- the Tumblr Radar -- beginning in May.

Tumblr spokesperson Katherine Barna was quick to point out to Business Insider that it's not really advertising. That ad unit is "not an ‘ad unit’ per se, but a package of native promotion for the Tumblr post ― the most essential and versatile piece of our network." Right.

As Betabeat's Kelly Faircloth observes, Tumblr isn't a spring chicken; it's five years old and has raised some $125m. With that as a backdrop, Karp's unexpectedly brief keynote at AdAge digital, which he used to announced the ad spot, coupled with Karp's admission that "I was probably being an idiot" when he dismissed advertising, hints that Tumblr's young CEO may be under pressure from investors to monetize his creation.

Depending on how Tumblr executes, that might cause some users angst, but such a move was all but inevitable.

The reality for many of today's most popular publishing and social startups is that advertising is the only viable way to transform eyeballs into the type of dollars their investors expect. With valuations for the hottest consumer internet startups soaring into territory not seen since the .com boom, the opportunity to cash in may not last forever, so expect to see more and more holdouts like Tumblr relent and launch ad offerings of their own sooner than later.

Patricio Robles

Published 19 April, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (5)


Dean Marsden

I totally agree that monetisation is essential no matter how much funding you can raise. It can be argued that advertising can ruin free speech and content on the Internet however without it there just wouldn't be the resources needed to enable this.

Users are so used to services being free and advertising usually becomes part of the experience. Many people don't even notice them in my opinion.

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