Why Tumblr May Be the Next Tech Buzz Word

Tumblr may soon be the next social networking buzz-name. It is an interactive website that allows users to post texts, photos, music and videos — a kind of juiced up Twitter.

Source: tumblr.com

Founded in 2007, it has grown into the world's 12th-largest website.

While it has some investor attention — the company is operating with $125 million so far — the question is whether the site can achieve profitability in the fiercely competitive world of online social media.

"We make a little bit of revenue off of selling themes for blogs," Andrew McLaughlin, Tumblr's vice president, said in a Friday appearance on CNBC's "Squawk Box."
The company has yet to make profit, but that may soon change. The site had roughly 140 million unique visitors and clocked 18 billion page views in April alone. Harnessing this traffic for advertisers is the company's next step.

"We're going to sell blog posts as an advertising unit. We're saying to brands, 'Come and be bloggers, be creative, promote yourself and get popular,'" said McLaughlin.

Questions swirling around Tumblr, on the heel's of Facebook's recent acquisition of photo-sharing site Instagram, include whether its aim is to be acquired or to raise money via an IPO.

"We're not counting on some kind of grand exit through acquisition," McLaughlin said. "The best exit is to be master of your own domain. Make money, and be profitable standing on your own two feet."

McLaughlin made no mention of IPO plans. Right now, he's focused on would-be partners: brand names with a global audience in sectors such as entertainment, fashion, luxury and autos.

The pitch? "We let people blog about what they want to be rather than who they are, which is sort of what Facebook is," said McGlaughlin.

High expectations for the small company are in part based on McLaughlin himself. He served as deputy technology officer under President Barack Obama and was Google's global public policy director from 2004-2009.