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Why Tumblr is not Twitter or Facebook

Following Yahoo’s $1.1bn acquisition of Tumblr Pandodaily published an article asking why Tumblr and Foursquare, New York’s top consumer web startups, haven’t had the same success as Twitter and Facebook. First the numbers, as measured by 2012 revenues Foursquare and Tumblr are a long way behind:

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Pando points out that one would expect Tumblr and Foursquare’s proximity to New York’s strong advertising industry to give them an advantage over their Valley competitors when it comes to building an advertising business, but then comes to the conclusion that the reason they fell behind is more likely to do with access to cash and talent. Valley based companies are more easily able to raise money and have a larger pool of people with scaling experience to recruit from.

That argument makes sense, and I’m sure explains part of the discrepancy in performance, but for me the bigger reason is that the use cases for Twitter and Facebook are important parts of our every day lives whereas Tumblr and Foursquare are more nice-to-haves. Keeping up with news and staying in touch with friends are more important for more people than self expression and checking in/restaurant discovery. More important use cases means more people coming back more often and greater tolerance for ads, and hence much bigger opportunity.

  • Ian Collingwood

    Good points Nic. The use cases are definitely different, although I wonder whether Tumblr might be encroaching a little on FB and twitter turf in some segments. Chatting to my young cousins and nieces made it clear to me that for this demographic (12-16) both the incumbents are old news and that the majority of their time online is spent on tumblr. If I were FB I would be concerned about this.

  • Mark Hammond

    I’d agree, it’s also just a much more of a niche audience; there’s only a limited number of people that want slightly more space to express them selves that twitter or reddit but don’t care enough about it to put a proper blog together. It also has a MySpace feel to it which for me limits it to the teenage demographic.

  • http://www.theequitykicker.com brisbourne

    agreed

  • http://www.theequitykicker.com brisbourne

    I was reading some research this morning which found that teenagers are using Twitter and other social media sites as a supplement to Facebook. They find the new sites more exciting but Facebook is the mainstay, and time on the other sites isn’t detracting meaningfully from time on Facebook. If I was Zuck I would be looking at Tumblr and thinking about how I should respond, but I wouldn’t be worried about them as an existential threat.