How Tumblr Saved Itself ~$20 Million With One Simple Move

Business Insider

Tumblr generated $13 million in revenues during 2012, according to Forbes, and it hopes to be profitable in 2013.

One reason profitability is even within the realm of possibility is that the company finally made a hard, but smart choice toward the end of last year.

It moved off of third-party servers and built its own data center, which came online in October.

Tumblr CEO David Karp won't get specific about how much the company saved doing this, but a couple sources close to the company that we've talked to say that Tumblr's burn rate moved from $4 million to $5 million per month down to ~$2 million.

That's annual cost savings of more than $20 million per year.

Correction: An earlier version of this story said that Tumblr moved off Amazon Web Services. It did not. It moved   hosting/serving/processing off of an ISP based in Dallas to its own data center in Newark. Amazon is still used for Tumblr's static image storage.



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