Tumblr, a blogging platform investors valued at $800 million, has a lot of promise.
It turned on its first true monetization efforts earlier this year and generated $13 million in a matter of months. Its two ad placements, Spotlight (promoted accounts) and Radar (editor-promoted content), generate 120 million impressions per day.
But the company has raised $126 million to date and it plans to burn about $40 million next year, so it has an aggressive revenue goal of $100 million in 2013.
Forbes’ Jeff Bercovici profiled Karp and calls this a “make or break” year for Tumblr, during which it must prove three things:
- David Karp is the right person to lead Tumblr. Investors support Karp and aren’t pushing him out, but they aren’t against bringing in another executive either. The company may still hunt for a Sheryl Sandberg-type executive to replace John Maloney.
- Its hockey stick growth will continue. Tumblr’s traffic has doubled since it raised $85 million last year, and it now has 18 billion monthly page views.
- It can become profitable.
One person who knows the pains of the media industry well is Nick Denton. The Gawker CEO and founder bootstrapped his company to 560 million pageviews and 35 million monthly uniques. He wishes Karp luck on what he’s sure will be a tough road ahead.
“I really like David, but he’s got a brutal year ahead,” Denton tells Bercovici. “The pressure on Internet media companies to deliver revenues is going way, way up.”
Gartner analyst Brian Blau agrees.
“The road is littered with dead companies that made the wrong move at the wrong time, the MySpaces of the world,” Blau tells Forbes. “They’ve got to be really careful.”
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