What would have happened to Tumblr without Yahoo? Trouble

http://gigaom.com/2013/08/08/what-would-have-happened-to-tumblr-without-yahoo-trouble/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+OmMalik+%28GigaOM%3A+Tech%29&utm_content=Google+Feedfetcher

by prostoalex • 13 years ago

38 18 13 years ago

gigaom.com

aiaf• 13 years ago

The article doesn't clarify running costs for Tumblr. Might help us put things in perspective-- why is $13,000,000 in advertising revenue troublesome?

hamburglar• 13 years ago

Hard to say what their infrastructure costs are, but just salaries for 178 employees is way more than $13MM.

boyter2• 13 years ago

The real question being why did they have 178 employees?

It sounds almost like they were following the Digg engineering approach rather then Reddit's.

ScottWhigham2• 13 years ago

I'm not sure how to guesstimate salary costs but $13MM/178 = $73,000 per year per employee. Paying $73,000 per year means that you are paying salary, payroll taxes, and any benefits. The actual salary, for example, might be $55,000 with ~$10,000 tacked on for payroll taxes and another ~$8000 in various benefits/costs.

An average salary of $55,000 seems a bit low but not by too much. I'd guess that $13m is right around their employee cost. If that's true, the rest of their cash must be funneled towards tech and advertising.

adventured3• 13 years ago

If they raised $85m in September 2011, and were down to $16.6m upon acquisition, that implies a pretty substantial burn rate, even being generous.

adventured3• 13 years ago

It's interesting too, because previously Karp had claimed that it would be easy to reach profitability. He said all they'd have to do is put one ad spot on the dashboard, and that would do it based on views. Color me skeptical that it would have been that easy.

gojomo• 13 years ago

Tumblr almost certainly had other options – another bidder or possible bridge/follow-on funding.

shiftpgdn• 13 years ago

You can't have follow-on funding for all eternity.

super-serial• 13 years ago

$80 million cash out for 4 years of servitude? Bad deal.

I wouldn't sell my baby for that.

coryl• 13 years ago

I wouldn't sell my baby for that.

Heh, well first you'd need to have a baby. A baby worth $1bn of which you owned 20-25% equity.

What would have happened to Tumblr without Yahoo? Trouble

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