I love Tumblr, but they've not only failed to monetize well, but the few cases in which they have are rather lackluster. Their theme marketplace is a bit of a joke, and they are virtually identical to Posterous.
I realize Tumblr struck first, but if it's that easy to duplicate your business, then how valuable is it?
What's funny is that I simultaneously agree with you and think you're missing the point.
Tumblr has done an awful job of monetizing. I'm pretty sure the team doesn't give much of a shit about monetizing, because they seem pretty damn happy with their site as-is and every monetization attempt of theirs has been something ephemeral and community-focused. The only one that's been long-lasting is their Theme Garden, which is poorly-designed and, I suspect, not very successful, mainly because Tumblr's primary audience is looking for a free, well-designed way to express themselves, and sees no reason to pay $49 for a pretty theme.
But at the same time, Tumblr is immensely valuable, because it's becoming the go-to community for bored youth. Name a single community more geared at your average (non-techy) youngster. The only one I can think of is LiveJournal, and LiveJournal is not sexy. Tumblr is sexy. It is surprisingly intelligent considering how sexy it is, but it is not a web site used by people carefully calculating features and userbases; it is a web site used by people who like web sites to look and act sexy. (Sometimes I feel frustrated at Tumblr because of this; it's not really worth it. Nothing wrong with people who'd rather be sexy than smart.)
Posterous has more features than Muscle Milk has nutrients, and Garry Tan (the only Posterous staffer I've talked to) is a superbly bright and kind person who spends way more time answering inane emails than a successful person ought to, so I like Posterous, but it is not a sexy site. "Sexy" isn't something you usually put on bullet point lists, but it's super-duper important, and it's very difficult to design for. Actually, I think there's a case study in design right here: The more features you place somewhere, the harder it is to make it sexy. Tumblr is very good at adding features and maintaining their inner sexy. Not just in how they look but in how they feel - I've never felt a site that makes posting new content feel as rewarding as Tumblr does. (Second place: Facebook, distantly; they used to be better at this.)
It's valuable because a significant portion of youth worldwide are addicted to it. If I'm launching a new product (whether it's "internet service" or "TV show" or "me trying to be clever in a blog") I'm going to pick Tumblr over Posterous, because what I want isn't a set of features that make my job easy, what I want is easy connections to an enormous market that might latch on to me and make me popular/viral/book deal/whatever.
(By the way, the theme marketplace is pretty poor, but the theme garden is one of the highest-quality purveyor of themes you can get for any blog engine. I wish Wordpress or ExpressionEngine or Drupal had themes that consistently sexy. But I'm admittedly biased: something like 40,000 people use my old Tumblr themes.)
Ironically LiveJournal is a service that really struggled to monetize, I hope that isn't the case for Tumblr.
Tumblr = New MySpace.
Tumblr has been testing their "promote my tumblr" badges for a few months, it's only very select presently and I assume this is their primary focus for monetization in the near future.
Tumblr got money from sequoia capital - I assume they pitched something about monetization plans.
You're absolutely right that Tumblr is sexy. In fact, that's why I prefer it over Posterous. That being said, I'd be curious to see how many of these blogs are abandoned within a week, or even a few months?
I know that I have 10 Tumblr blogs, each of which I forget about after a few weeks, and I'm a tech-geek.
I love the simplicity of Tumblr, and it's a great service, but I just don't see how they can come out ahead unless they get better at monetizing. I get that they aren't focused on it, but shouldn't they get some practice?
My bet? Probably most of them. But that's only because almost every service is abandoned by most of its initial users. I set up a site once where literally the instant you made an account you were adding content; you typed your name, hit enter, and then filled out a profile field. Still this led to a great deal of blank profiles.
Probably if their goal is to make a load of money they should start figuring things out. I don't know if that's their priority, though; they seem to enjoy being Internet superstars. Hopefully they'll hit on a wonderful profit plan, but really, no hurry. Plenty of companies have spent excessively long times getting profitable but they've pulled through anyway.
I believe that Posterous specifically made their theming language to be identical or at least similar to Tumblr's, so many themes are compatible and have been borrowed.
Tumble is 10 to 15 people with billions of page views. They could choose to be profitable tomorrow with one google ad on the dashboard. Definitely a company to watch...
So, why do they need all that money?
It's bizarre that there are companies testing and flying rocket-planes and VTOL sub-orbital rockets with much less funding than this.