Tumblr makes no money. Surprise!

The extraordinary thing is not only does it make no money but it never made money. I guess it's enormity is impressive and maybe that's why Yahoo wanted it.

You can be absolutely certain the founders and VCs tried to make money from Tumblr prior its sale to Yahoo. Which means Yahoo has betted quite lot on being able to monetize a platform that the the people that understood the service better than anyone else couldn't make work.

With that back-drop, the move into video makes a lot of sense. Youtube has ads, so it'll likely not offend anyone to have video ads on Tumblr. And whilst you can create a "channel" on Youtube the environment is very much Youtube branded so having "my" video blog on Tumblr adds up nicely.