Liz Gannes

Recent Posts by Liz Gannes

Now Here’s Something You Don’t Hear Every Day: Tumblr Expects to Be Profitable This Year

Say what? A social media company thinks it has figured out how to bring in more money than it spends in a year? Surely you want to brag about all those eyeballs again, right?

DavidKarpDLDBut profitability is what Tumblr expects to achieve in 2013, according to Bloomberg.

“We expect that the monetization will lead us to profitability this year,” were the words of head of sales Lee Brown, who joined the company last fall.

In particular, Tumblr said that the addition of paid post promotion on its mobile apps will be a big new revenue driver. Tumblr has the 50th most-used iPhone app in the U.S., according to Onavo, which doesn’t yet publish Android ranks.

So could profitability actually be within the realm of possibility? Maybe so, since Tumblr seems relatively cheap to run.

The New York City-based company has raised $125 million in venture funding and has 162 employees. Tumblr previously told Forbes it had $13 million in revenue in 2012 — with an estimated $25 million in operational costs — and it hoped for $100 million worth of revenue in 2013. That would be a year-over-year gain of 769 percent.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work