
Look What Tumblr's Done With All Its Money - a4agarwal
http://www.businessinsider.com/hey-look-what-tumblrs-done-with-all-its-money-2009-8
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lawrence
50M visitors and 800K posts per day are massive numbers. If those numbers are
true, this post is way, way off base.

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zepolen
Why? I don't see how having many users of a free product amounts to anything.

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webwright
Really? Do you think Google's free users have value? What do you think
Facebook could sell for tomorrow if they wanted to?

I'm all for charging for stuff, but free users (in volume) can have tremendous
value. If they are a particular/targeted audience (Tumblr's isn't) they can be
incredibly valuable. I've read that home improvement content can get $20 CPMs.

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patio11
I would steer clear of the domain registration option myself. Many people here
have strongly negative impressions of GoDaddy because GoDaddy bombards them
with upsells when you try to check out. There is a reason for this: the core
business of registering domains names generates _mouse droppings_ for profits
on a single domain.

If you want to be a GoDaddy partner taking a _fraction_ of those mouse
droppings from people who are going to be buying a single vanity domain, then
you are spending an awful lot of engineering time building a system which will
probably never scale to profitability.

Sidenote: The GoDaddy business model is split into two parts. For serious
buyers of domain names, they make their money on volume and renewals (and
private registration -- a ludicrously valuable revenue stream since it is high
value to the customer and 98%+ profit to GoDaddy).

For end-users of domain names, they make their money on the high-margin
services (hosting, email, SSLs, their worthless SEO products, etc) they can
bundle with the sale.

That's just my analysis, incidentally -- I love them to pieces (they're cheap
and they give you exactly what it says on the tin) and have spent literally
thousands over the years.

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dpcan
It's important to note that GoDaddy now has an "Express Buy" option right on
their homepage now to skip over all the up-sells. They appear to have heard
our cries.

I think the author was just using GoDaddy as an example. With the money they
have, they could possbily BECOME a registrar. Or, they could piggy back off of
a number of APIs available for domain registration.

Still, I do agree that the domain registration route is not the way to go.
It's a completely different business model (not that they have one now), but
there are a number of other ways they could possibly monetize with such huge
numbers.

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dpcan
He knocks them for pandering to their current user base, but when you are a
business that grows by word-of-mouth, your current users are your sales-force,
so pandering is a MUST. But I completely agree that they could have used their
time a little more wisely than to go after the shark/kitty idea.

Maybe they should have spent more time on their API so one of their
shark/kitty loving users could have created kitty widgets on their own time.

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brm
To be honest, the headline of this article itself struck me as amateur. That
said, Karp flips between handling it well and not handling it well in the
comments. Jaime Wilkinson of Know Your Meme seems to do the best job of
clearing things up in the comments...

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10ren
Sounds like they're using that marketing approach of visualizing just one
specific user, and trying to maximize the experience and value for that one
person. Apparently, real users will tend to align themselves with that
idealized user. They're using that marketing approach, and it's working.

I think Guy Kawasaki talks about this, and it's also in _Crossing the Chasm_.

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joel_feather
This seems like personal animosity to me.

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sho
Ha, exactly what I was thinking. Sounds like the author is in a fund which
invested in Tumblr. And he's got Twitter envy and feels the need to micro-
manage!

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Tiktaalik
Hey Sharks n' Cats is a growth market.

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rrikhy
Should've gone with Ninjas and Pirates...

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Plugawy
Too obvious?

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mrshoe
All press is good press?

I do wonder why TechCrunch's startup reviews are almost always glowing. What
kind of pressure is there on these media outlets to write positive articles?
Is there any incentive to not rip into companies like BusinessInsider did
here?

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jkincaid
They aren't always glowing. But in my case I'd rather write about a startup I
like than one I don't, so if there is a trend toward positive reviews that
probably explains it.

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mrshoe
That sounds like a sensible explanation. Please don't see my comment as an
invitation to post a scathing review of my startup. ;-)

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dbreunig
Tumblr's got a small staff and a presumably long runway. No reason to rush
when there's not much competition in this space. (Posterous doesn't have the
community to match)

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andreyf
I'm not sure if tumblr and twitter are substitutes. For me, they're
compliments - I put on tumblr ideas I can't express in 140 characters.

