Yahoo’s move to snap up the Tumblr blogging empire in a US$1.1 billion deal has sparked a mix of emotions.
Tumblr users are upset, Silicon Valley entrepreneurs are jealous, and Wall Street analysts are scratching their heads as to why Mayer would hand over $1.1 billion for a company that made just $13 million in revenue last year.
Of course, it’s better than the $1 billion Instagram-Facebook deal, which added zero to the social network’s bottom line.
The real winner here, of course, isn’t Yahoo. It’s Tumblr founder David Karp, who has managed to build the world’s largest blogging empire in just five years – at just 25 years old.
Tumblr is a global phenomenon. The network counts 50 billion blog posts and billions of page views every month. The social media trends of using GIFs (Graphics Interchange Formats) to emphasise conversations was popularised on Tumblr, and the network grew because, unlike WordPress, it provided more customisation for little cost.
Some lucky bloggers have even managed to score some book deals from their unique Tumblr accounts.
Karp isn’t going to see all of that $1.1 billion – not by a long shot. Tumblr has raised $125 million from Union Square Ventures, Spark Capital, Krum Capital, Sequoia Capital and Betaworks, among others.
However, The Guardian has reported Karp’s stake as 20% – valuing his share of the deal at a massive $220 million.
Not bad for a 26-year-old. Here are five things you probably never knew about Tumblr’s young founder:
Like plenty of other successful entrepreneurs, Karp never completed high school. He was actually home-schooled for most of his education, and then went on to start work straight afterwards.
However, he doesn’t necessarily feel it was the best way to go. He told Forbes earlier this year he feels he missed out on a lot – “just a whole lot of normal, social, childhood kind of stuff that I definitely missed out on”.
Silicon Valley hasn’t cared much about profit in the past few years. Twitter took a while before it even made up a revenue model, and last year’s deal with Instagram and Facebook was a landmark simply for the fact the photo app never made any money.
So it’s not surprising Karp has never really cared much about profitability. Although he’s said the network itself could be profitable, he told a paidContent conference last year that profit is “not a metric that is particularly important to us”.
Cue Wall Street analysts shaking their heads.
This one will make you jealous. Karp taught himself to code at just 11 years old, after reading an HTML for Dummies book.
Usually when entrepreneurs hit it big they like to buy some bling, maybe a car or a nice house. While Karp has bought himself a $1.6 million loft in New York, he actually doesn’t own a lot of stuff. In fact, according to this Forbes article he owns just one suit.
But this minimalism doesn’t just apply to products, it applies to everything – his taste in design or even the way he works.
“When he travels he avoids making plans more than a few days in advance, even on his trips to Japan, and packs only the sveltest of carry-ons,” Forbes reported.
Back in 2010, Karp turned a few heads when he said the idea of advertising “really turns our stomachs” and said ads would never show up on Tumblr.
However, he’s since clarified those remarks, saying traditional advertising isn’t necessarily effective. He told the Wall Street Journal most video ads appear “at the most frustrating moment possible”, and called everything else “uncreative”.
Karp definitely doesn’t like advertising, but he’s not opposed to it entirely. The network started selling ads last year.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
