Both are free blogging services, no price plan, no add-on charges, free support. And I'm not aware there is ads too. Where do they get their income? Consultation fee? Writing a book about their platforms?
Platforms like posterous and tumblr rely heavily on scale - ie, a large number of users. So, their first priority is to get as much users on board as possible from other publishing platforms. Once they reach a certain threshold, they can start experimenting with revenue generation - be it in form of advertising or premium hosting etc.<p>Thats similar to the way Wordpress played out.
I would assume that they're building momentum before they introduce premium services. Flickr's probably quite a good example of this. I know Posterous have mentioned that they'll be implementing paid-for extras in the future, but that the current offering will remain free.
"Coca-Cola is using Posterous for its NCAA “Dept of Fannovation” where people can come up with ideas to improve the experience of being a fan, and a chance to win $10,000."<p><a href="http://ycombinator.posterous.com/posterous-s08-jumps-on-the-revenue-wagon-sign" rel="nofollow">http://ycombinator.posterous.com/posterous-s08-jumps-on-the-...</a>
I recently started using tumblr and its mind blowing how much they allow you to do for free. There have very little limitations, if any. They allow you to put ads on you blog with no string attached AFAIK, custom domains (other do it too).<p>I think they make a decent amount of money on premium theme and get your blog listed on featured directories and other paid features.<p>I was hoping that they would allow API access to password-protected blogs. I use marsedit to post on my blog, but can't do it on my private blog.
Posterous is selling domains for around $25 per year (with discount for more years).<p>I don't believe they make all the money from that though, but I'm sure it helps.
It's a classic freemium model. Their modus operandi is going to be get as many hyper-engaged users as possible, and hope to monetize by either introducing premium-type features, or gathering user data and advertising (but probably a combination of all available options).
They don't have a clear income. They aim to get big and then think of income after that. I don't like this model, because at first, I'll have to rely heavily on Buzz and VCs.