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Comment by holdenc | Hacker News Reader

Tumblr will have the last laugh here. There's practically no market for tasteful online advertising or paid software in China. So, while he might rack-up users it will be hard to monetize this.

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Tencent is the second largest Internet company in the world, and it monetizes primarily through virtual goods, including blog themes. Chinese users don't buy software, but they do pay for online services.

Tencent is... unbelievable. I saw that huge piece of crap IM client on the PC of basically every Chinese grad student I knew. I also recently found out that their QQPlayer media player violates the GPL by including code from ffmpeg without any attribution or licenses; combine that with the way their IM client used to, and still may, censor messages, and I'm wondering what the hell else they're up to! :)

I live in China (well, 40% of my time), work for a social network, and I think you're wrong. Tumblr is sometimes blocked here, and I would bet that it's going to have the same destiny as Facebook and Twitter here. The local Facebook clones work very well here, as does the local Twitter clone (that employs something like 500people). Meanwhile, the "originals" are blocked, and only people who can access internet through proxies or VPNs can access them. Therefore, I don't really think of any reason why Tumblr would have the last laugh.

So basically this is a business model that can only survive because of restrictions set by the current government.

What will happen if China and the US reach some kind of agreement, and unlocking online US-services will be part of it?

AND when cloning physical goods (like phones, cars, clothes, shoes, whatever) -- you can export them, since people are willing to pay lower prices for clones. How can you export a Tumblr or a Twitter clone, when both are freemium?

How are these clones surviving? Do they generate revenue, when Tumblr, Twitter and Facebook can barely do it?

Something is not right about this picture ;)

From what I understand, micro-transactions for virtual goods is a lot more common in places like China, and if you can offer custom themes or other "value-added" services to these clones, you can monetize off of that - must like Farmville makes money on selling people special seeds.

If China and the US reach some kind of agreement - and the services were unlocked - there would already be enough of a market share for the existing clones to maintain control over that market. Future clones would still have a chance in succeeding as well depending on the race to localisation of the products in the local language and demographics.

The Chinese clones may have locked in a critical mass of users who are unlikely to switch to (English language) US sites like Facebook and Twitter.

Not really, since Tumblr doesn't have any ads either. Come to think of it, besides selling premium themes, how else does Tumblr make money? Surely all the trust-fund hipsters on the site don't bring in wheelbarrows of money with their ironic 1-gear eco-bikes, do they?

You were downvoted for adding a snidey remark to a decent question. Next time just ask the question. Since I'm curious as well, how does Tumblr make money besides themes? Does anyone know their monetization strategy?

Yeah, sorry I forgot Hacker News was all srs bznss where no humor is tolerated whatsoever.

On the Tumblr monetization front, TheStartupist[1] covers a good portion of their story. Checking Crunchbase[2] shows that they've gone through pretty large funding rounds, with their last one (D) at $30M the largest. I've been trolling Tumblr for the last year and half, and the only things I've been able to scrounge are the $9 Directory listing under your category of choice and the premium themes.

They're still growing massively, as all the cool kids congregate there to post their Instagram-faded pics of teenage angst, but are hemorrhaging money like Twitter. And like Twitter, advertising is viewed as pure evil[3] and not a viable solution to generate revenue. Twitter realized the inevitable and started Promoted Tweets recently, and Tumblr will have to do something similar soon as well. Maybe they make enough from the themes, but that seems a little quixotic.

[1]: http://thestartupist.com/2011/01/the-hypothetical-monetizati...

[2]: http://www.crunchbase.com/company/tumblr

[3]: http://latimesblogs.latimes.com/technology/2010/04/tumblr-ad...

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I'm not so sure about this? Has tumblr gotten its way to profitability yet? I don't know.

I'm sure they will figure it out eventually, I'm just unsure whether they are going to have an easier time then this chinese clone(at least to the point where they will be pointing and laughing).

Lets not forget that tumblr has spent millions of dollars and years coming up with the mix of what makes tumblr work and it has been essentially copied wholesale, if this ends up working in a chinese market, thats a huge competitive advantage for the chinese clone, because they didn't have to spend any of that money or resources to begin with.

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