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Wednesday September 3, 2014

Fred Wilson at #adtechNY Says Tumblr Will Avoid GeoCities Fate

Image representing Tumblr as depicted in Crunc...

Image via CrunchBase

GeoCities, popular web-hosting site from the 1990s, once attracted $3.5 billion from Yahoo but then quickly died out. GigaOm poses Geocities as a cautionary tale for emerging sites. At Ad Tech New York this week, Fred Wilson, well-known NY venture capitalist, discussed how both Tumblr and Geocities created a massive audience in a short amount of time. However, Wilson believes that Tumblr will not have the same fate as Geocities because the blog site avoids advertisements. He said, “GeoCities slapped ads everywhere. The performance and appearance was ugly. At Tumblr, the business model is quite elegant.”

Tumblr’s lower costs for development allow it more time to figure out a money model than a site like GeoCities. Wilson also noted the importance of increasing scale before focusing on monetization. Additionally, Wilson also believes very strongly in native advertising, having said, “If you just slap up some generic ad format, people tune it out and it doesn’t perform. People don’t hate advertising. They hate bad advertising, interruptive ads or poorly targeted ads.”

GigaOm