50M visitors and 800K posts per day are massive numbers. If those numbers are true, this post is way, way off base.

Why? I don't see how having many users of a free product amounts to anything.

Really? Do you think Google's free users have value? What do you think Facebook could sell for tomorrow if they wanted to?

I'm all for charging for stuff, but free users (in volume) can have tremendous value. If they are a particular/targeted audience (Tumblr's isn't) they can be incredibly valuable. I've read that home improvement content can get $20 CPMs.

They'll make it up in volume!

I would steer clear of the domain registration option myself. Many people here have strongly negative impressions of GoDaddy because GoDaddy bombards them with upsells when you try to check out. There is a reason for this: the core business of registering domains names generates mouse droppings for profits on a single domain.

If you want to be a GoDaddy partner taking a fraction of those mouse droppings from people who are going to be buying a single vanity domain, then you are spending an awful lot of engineering time building a system which will probably never scale to profitability.

Sidenote: The GoDaddy business model is split into two parts. For serious buyers of domain names, they make their money on volume and renewals (and private registration -- a ludicrously valuable revenue stream since it is high value to the customer and 98%+ profit to GoDaddy).

For end-users of domain names, they make their money on the high-margin services (hosting, email, SSLs, their worthless SEO products, etc) they can bundle with the sale.

That's just my analysis, incidentally -- I love them to pieces (they're cheap and they give you exactly what it says on the tin) and have spent literally thousands over the years.

It's important to note that GoDaddy now has an "Express Buy" option right on their homepage now to skip over all the up-sells. They appear to have heard our cries.

I think the author was just using GoDaddy as an example. With the money they have, they could possbily BECOME a registrar. Or, they could piggy back off of a number of APIs available for domain registration.

Still, I do agree that the domain registration route is not the way to go. It's a completely different business model (not that they have one now), but there are a number of other ways they could possibly monetize with such huge numbers.

He knocks them for pandering to their current user base, but when you are a business that grows by word-of-mouth, your current users are your sales-force, so pandering is a MUST. But I completely agree that they could have used their time a little more wisely than to go after the shark/kitty idea.

Maybe they should have spent more time on their API so one of their shark/kitty loving users could have created kitty widgets on their own time.

To be honest, the headline of this article itself struck me as amateur. That said, Karp flips between handling it well and not handling it well in the comments. Jaime Wilkinson of Know Your Meme seems to do the best job of clearing things up in the comments...

Sounds like they're using that marketing approach of visualizing just one specific user, and trying to maximize the experience and value for that one person. Apparently, real users will tend to align themselves with that idealized user. They're using that marketing approach, and it's working.

I think Guy Kawasaki talks about this, and it's also in Crossing the Chasm.

This seems like personal animosity to me.

Ha, exactly what I was thinking. Sounds like the author is in a fund which invested in Tumblr. And he's got Twitter envy and feels the need to micro-manage!

Hey Sharks n' Cats is a growth market.

Should've gone with Ninjas and Pirates...

Too obvious?

All press is good press?

I do wonder why TechCrunch's startup reviews are almost always glowing. What kind of pressure is there on these media outlets to write positive articles? Is there any incentive to not rip into companies like BusinessInsider did here?

They aren't always glowing. But in my case I'd rather write about a startup I like than one I don't, so if there is a trend toward positive reviews that probably explains it.

That sounds like a sensible explanation. Please don't see my comment as an invitation to post a scathing review of my startup. ;-)

> Is there any incentive to not rip into companies like BusinessInsider did here?

Libel?

Sure but it's only libel if it's not true. And, as the author of this post did, you're always free to update the post as the owners contact you and additional info is made available.

> Sure but it's only libel if it's not true.

Truth is a defense against libel in the US, but not in all other countries. For example, truth is not a defense in the UK.

Tumblr's got a small staff and a presumably long runway. No reason to rush when there's not much competition in this space. (Posterous doesn't have the community to match)

I'm not sure if tumblr and twitter are substitutes. For me, they're compliments - I put on tumblr ideas I can't express in 140 characters.