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Tumblr: 'We're pretty opposed to advertising'

April 17, 2010 |  6:01 am

Tumblr-david-karp
NEW YORK -- Tumblr is drawing up all kinds of off-the-wall methods to make money from its micro-blogging and social-networking website. Founder David Karp and his 11-person team hasn't quite struck gold yet, but they refuse to venture down the traditional route of plastering advertisements on the site.

In a way, we've heard this story before. During Twitter's first four years, its founders were vocally averse to ads. That was until this week when Twitter announced Promoted Tweets, which would let companies place ads on the site's search results.

Karp, 23, heard rumblings of the story before any of us, actually. Twitter and Tumblr share two major investors, Spark Capital and Union Square Ventures. In a recent board meeting, Karp was suddenly confronted with questions from investors about whether the New York company would consider selling search ads.

For the 3-year-old Tumblr, monetizing search is something of a futile idea. Developers added a search function to scour the site's 4.4 million blogs just seven months ago. Since then, they've refined the feature to allow users to track certain keywords, called tags, similar to Twitter's "saved searches." Still, it remains an underutilized feature.

Karp scoffed at the idea of slapping ads on users' free blogs. Contextual ads, like Google's, whose content is based on crawling text on pages or e-mails, would be ineffective, Karp said. His own blog, for instance, has no motif. He posts an array of random photos that lack captions (they say a thousand words, no?) and pithy quotes from friends.

He also refuses to put ads on the dashboard, users' customized streams of posts from blogs they follow.

"We're pretty opposed to advertising," Karp said this week in an interview at the company's Park Avenue office. "It really turns our stomachs."

Some Tumblr users seem to agree. Anthony De Rosa, who runs the popular Soup blog on Tumblr, suggested Twitter immediately offer an ad-free version at a premium. Though, De Rosa places some small text ads on his blog.

A paid version was one idea Tumblr nearly launched but scrapped at the suggestion of investors, Karp said. Called Tumblr Plus, it would have made some features available only to users who subscribed. Tumblr has since rolled out all of the functions planned for Plus to users for free.

"We're just now to the point where the Tumblr platform is where we had always imagined it," a cheerful Karp said. "Now that we're there, I think you're going to start seeing a lot more revenue-generating stuff. Because that's what we're excited about doing now."

Tumblr will keep digging to find significant revenue sources. It's not there yet, but Karp assures that those services will be nontraditional.

Some unusual experiments include buying virtual stickers and spots on a directory of recommended blogs. On April 1, Tumblr jokingly added a functional copycat of the Million Dollar Homepage, a successful Internet phenomenon that sold virtual real estate to advertisers. Tumblr's April Fools' joke netted $4,000 from its users at $5 a spot.

Looking at safer formulas, Karp said he's been obsessed with the concept of marketplaces recently. For example, Tumblr began letting Web designers sell themes to users about three weeks ago. Tumblr provides the infrastructure and takes about a 30% cut of the sale -- "just like the App Store," Karp said of Apple's business.

Themes range from $9 to $49 a piece. Early signs show the Web design hub as a successful business. Karp called it "the most profitable revenue-generating feature by far." But when the competition is stickers and vanity banners, that's not saying much.

Tumblr isn't ready to emerge from the laboratory just yet. "We don't know if we're pricing it right," Karp said about the design store, before fumbling through a series of phrases you might hear from a get-rich-quick book pitch. "I don't know any of this talk."

Keeping with the marketplace theme, Tumblr pulled the trigger on its newest moneymaking idea on Friday. Karp is looking to again tap the site's dedicated art community -- he describes them as "avant garde bloggers" -- for a feature that lets users easily order prints of images posted to the site.

The trial was small -- one drawing on one blog -- but Karp is excited about the potential. Photographers and artists may eventually be able to opt into selling their work.

With supportive investors, Tumblr is in no hurry to spin the site into a sustainable business. But, one day. "We're looking for something unique and different," Karp said.

[Corrected, 8:25 a.m. An earlier version of this story incorrectly named the blogger as Anthony De La Rosa.]

-- Mark Milian
twitter.com/markmilian

Photo credit: Mark Milian / Los Angeles Times

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