Yahoo Deal Shows Power Shift - WSJ.com

The search for a Tumblr business model continues, under a new owner

"There are several risks for Yahoo. A popular venue for teens, Tumblr includes many Web pages of racially insensitive, pornographic and other sexually oriented content. Such pages wouldn't be attractive to advertisers. There is also the risk of diminishing Tumblr's appeal among some users with too-aggressive a push to bring in advertising revenue. Writing on his Tumblr blog Saturday, John Saroff, a former Google executive, estimated Tumblr could generate $108 million or more a year based on the rates advertisers generally are willing to pay for graphical ads online.
But he said Tumblr was "correct" to resist filling its site with advertising since doing so could upset its core audience. He added that Tumblr, as a blogging platform, would likely have to get permission from Tumblr blog writers like him before it could place ads on the blogs and share revenue. He compared the business model to that of Google's YouTube video site, where the company shares revenue with video creators."

Yahoo Deal Shows Power Shift - WSJ.com