This week Yahoo acquired the popular blogging service Tumblr for $1.1 billion. Writing for the business and investment site Minyanville, Carol Kopp discusses the likely business model for Yahoo’s newest content creator.
“Here’s a little dose of financial reality for Tumblr users who are upset that their free-to-use, nearly ad-free little corner of the Internet has been bought by big, bad corporate Yahoo: One way or another, probably sooner rather than later, you’re going to pay for your free blog,” she remarks. And that dose of financial reality will come in the form of ads.
“Advertisers are willing to pay a premium to advertise to a small but self-selected group of people with an expressed interest in golf or puppies or movies.”
It’s important to mention that in March Yahoo gobbled the start-up Summly for $30 million. That company offered readers computer generated summaries of news articles, another kind of content that helps Yahoo boost its traffic.