Context is important. Tumblr had a lot of porn blogs, sure, but most people on it were 15-25-year-olds running personal blogs, interest blogs, and building comm

Context is important. Tumblr had a lot of porn blogs, sure, but most people on it were 15-25-year-olds running personal blogs, interest blogs, and building communities. It was essentially the new Livejournal, but with Twitter-style reblogs. Yahoo knew this, and wanted this demographic for their ad ecosystem. They often thought of themselves as a 'media company', and they liked the creative aspects of the community. They also, wisely, knew that Tumblr users would never accept being forced into using a Yahoo account, so they had to keep the userbases separate. But this meant they couldn't use Tumblr to build Yahoo's social presence and its brand. They'd harvest some analytics, display some very loosely targeted ads to people highly averse to ads, but that mercantilist relationship was all was to be. In that light, they clearly overspent.