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The Boston Globe

Business

No regrets for Tumblr founder a year after Yahoo sale

NEW YORK — When Yahoo bought Tumblr for $1.1 billion a year ago, it sent a ripple of excitement — and anxiety — through the tech industry. Would Yahoo and its recently arrived chief executive, Marissa Mayer, breathe new life into Tumblr? Or would Yahoo smother the startup, as it did after acquiring popular young services like GeoCities and Flickr?

So far, the worst fears have begun to dissipate. Tumblr, a microblogging platform, has more than doubled its staff to 220, and its audience continues to grow, up 22 percent in the last year, to 40 million visitors a month, according to the metrics company comScore.

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“The most terrifying thing to me was that this would change the company in any way,” David Karp, Tumblr’s founder and chief executive, said in a recent interview. “But almost a year in, they have lived up to everything they promised.”

Still, the coupling has not yet solved the major issue that has long stumped Karp and Tumblr: How to generate significant revenue growth from the service.

“The stakes are as high as they’ve ever been,” said Karp, 27. He said the pressure was not coming from the “mother ship,” but from “proving that we can be a great, great business.”

Some people, including former employees of Tumblr, still question whether Tumblr should have sold itself when it did. And many of the company’s early and well-known employees left it not long after the acquisition, raising questions about what internal turmoil might be roiling beneath the company’s surface.

There is no question, though, that Yahoo’s size has given Karp and Tumblr some extra time to find a working business model. But Yahoo investors probably will not wait forever, and at some point, Mayer and Karp will have to answer for the big purchase.

Tumblr, founded in 2007, has built a dedicated base of users and carved out a unique niche for itself as a visually rich blogging platform within the social Web landscape dominated by Facebook, Instagram, and Twitter.

Karp wanted to keep hold of that niche and the site’s identity, and in the deal with Yahoo, he successfully pushed for Tumblr to remain largely independent.

Yahoo has happily offered its advice, support, and technical infrastructure, as well as money, Karp said, but Tumblr has maintained its autonomy.

“We’re our own shop. We have our own leadership, and we’re doing things our own way,” he said.

Lee Brown, Tumblr’s head of global advertising sales, who worked at Yahoo a decade ago, when the company snapped up services like GeoCities, says life under Yahoo has gone well.

“The leadership here is completely different,” he said. “It’s a different vibe, atmosphere, and we have a lot of opportunity to grow our business in many ways.”

Brown is leading the charge at Tumblr to figure out how to make money from the company’s sizable audience and network of 180 million blogs that are published on Tumblr’s platform.

But rather than slap banner ads on those Tumblr blogs and risk a mutiny from users, he said, the company is working with advertisers to encourage them to create their own Tumblr pages and come up with creative material — also known as native advertising — that fans can interact with.

Those branded blogs, however, don’t make money for Tumblr. The goal is to get brands to understand the appeal of Tumblr and then pay for premium placement on Tumblr’s products.

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