Tumblr, the social blogging site, has seen significant improvements in users over the previous two years. Since it was bought by Yahoo in 2013, it has seen user numbers increase by 46.2% in 2013 and 24.8% in 2014, which is a significant growth for a site that has just over 17 million users. It is predicted that growth will slow down to around 6.1% by 2018, topping out at 60 million users worldwide.
With this kind of growth, it is easy to see why Yahoo made the decision to buy the company, but it is also important to note that Yahoo has not seen this increase in Tumblr users impact their business in the way many would have thought in the meantime.
Marissa Mayer claimed that Yahoo was buying growth when they spent $1.1 billion on Tumblr, and if you look at the initial figures of simple numbers registered on Tumblr, then this would be the case.
However, the basis of the growth is to increase Yahoo’s ad network and therefore the bottom line from their ad revenue, which hasn’t happened. eMarketer, who look at metrics focussed on similar growth, claim that Yahoo’s share of the ad market will decrease from 9.2% to 5.8%. This essentially means a decrease in revenue as others like Facebook and Twitter increase their share of ad space.
However, it is not all doom and gloom for Yahoo.
Tumblr has a feature that both Facebook and Twitter don’t have, which is that it is open for others to see.
On Facebook or Twitter, in order to view and interact with content, you need to be a user. With Tumblr it can be viewed (and ads shown) to anybody who wants to visit. This means that as a certain post is shared around other social media platforms, ads will be shown on the Tumblr page that is shown.
As yet, this open aspect and the growth in Tumblr users hasn’t had the impact on Yahoo’s bottom line, but 2015 may be the year that they truly turn that corner.