How Tumblr Makes Money

Tumblr is a blogging and social networking site started in 2007 by David Karp and Margo Arment. Tumblr posted its first advertisements in May 2012 and subsequently earned $13 million in revenue; to this day, the company generates a significant portion of its revenue from advertisements, in addition to sponsored posts and other services.


In May 2013, Yahoo (AABA) acquired Tumblr for $1.1 billion. The social networking company was then acquired in June 2017 by Verizon (VZ) in a nearly $4.5 billion deal that merged Yahoo and AOL into a new Verizon-owned company called Oath. Although Tumblr reports it has 450 million blogs, with millions of new posts per day, the social media website has struggled to make money over the last year.


On Dec. 3 of 2018, Tumblr’s chief executive, Jeff D’Onofrio, announced that the blogging site would ban "adult content," defining the term as any image containing “real-life human genitals” or “female-presenting nipples.” The decision came just one month after Apple removed the Tumblr application from its App Store after child pornography surfaced within the app. The timing of Tumblr's content ban suggests that parent company Verizon may look to monetize the company with a return to the App Store in the future. Further, Tumblr has struggled with a loss of traffic since the ban: global traffic for Dec. 2018 was 521 million, while the figure dropped to 370 million by February, according to The Verge.


Exact revenue figures for Tumblr are not publicly available, but based on its traffic figures, Verizon has expressed interest in trying to sell the company just two years after spending billions on it.

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