Ad-hating Tumblr founder raises $5 million

Blogging startup Tumblr, a service that lets users publish short, simple blog posts, has secured a third round of funding for $5 million, first reported by MediaMemo, led by existing investor’s Spark Capital and Union Square.
So why does a company with more than 4.5 million users and 1 billion page views need more funding? Founder David Karp hasn’t quite figured out how to best monetize his company and is “pretty opposed” to advertising on the site, according to a recent LA Times interview. Advertising is a traditional way for many companies to generate revenue, usually through services like Google, who’s crawlers scan and search text for key words and post contextualized ads.  Karp decided this was not to the benefit of users and is currently testing other ways to monetize the service.
The company is exploring and testing several non-traditional ways to make money, including virtual stickers, which users can send to others or post on their own blogs. Other interesting revenue-based services include letting web designers sell themes, which make up the style and background design of a blog, for a 30% cut as well as selling reprints to photos that appear on the site.
Tumblr makes it easy for users to create and publish content, such as text, pictures, videos or links. The company has implemented several intriguing features which separate itself from similar services like Twitter. A new commenting feature lets users choice to either allow or not allow comments from users they follow. An interesting way to handle the onslaught of spammers that seem to exist on other services. Another feature, called photo-reply, let’s users reply to others using photos, rather than the traditional comment or re-blog, a way to instantly share content with followers.
The New York-based company, founded in 2007, has raised a total of $10 million in funding, the last round of $4.5 million was also led by existing investors, Spark Capital and Union Square.
Companies: Tumblr
People: David Karp