WHAT IT IS: A free service for creating a tumblelog, a subspecies of blog for posting snippets of content. If you're wondering how it differs from micro-blogging services such as Twitter, the answer is in its multimedia capabilities. Tumblelogs contain everything from text to photos.
WHY IT MATTERS: As with a lot of variations on the blog, the jury is still out on just how useful it will be to marketers. As a communication trendsetter, however, its popularity among Web 2.0 early adopters points to a continuing move toward using these platforms to distribute short-form content through a variety of channels, many of them mobile. For marketers who consider themselves content players and, naturally, media outlets, there are a wealth of distribution possibilities.
Another benefit is Tumblr's use as a high-level collector of various feeds. So the more social-media-verbose can have their blogs, Flickr, RSS feeds, Facebook newsfeed, deli.cio.us and even Twitter all dump onto Tumblr in a sort of unified communications stream or, depending on where you stand, junkyard.
ADS: To be determined. Here's a posting on the Tumblr blog, kept by its creators at Davidville, in response to a question about whether Google AdSense ads are allowed: "We haven't formed an official policy on advertising. But since our philosophy is building Tumblr into a complete tool, we certainly don't want to alienate any of our pro-users. Ads are a-OK."
BUSINESS MODEL: It's as yet unclear how Tumblr will make money, short of the ad play. The folks at Davidville are leaving open the possibility of premium services down the road, but they vow Tumblr will remain, by and large, free. Then, as Tumblr gains traction, it'll likely become acquisition bait, if history is any guide. Twitter is said to be sought-after by players such as Google and Yahoo that are always on the hunt for popular applications.