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‘‘It Was the Biggest Game of Chicken I’ve Ever Seen.’’

Those shareholders should be pleased that Tumblr addresses some of Yahoo’s more urgent weaknesses, offering up a cool brand, a massive community of users, a strong mobile presence, and engineering talent. Still, whether Mayer’s bet will pay off comes down to one thing, which is ads. Yahoo is good at ads; Tumblr has strenuously tried to avoid them. The company’s attempts to generate revenue began in 2010, when users could pay to get their blogs featured in a directory that no longer exists, or to purchase prettily designed premium themes, though most of the money went to the designers rather than Tumblr. In early 2012, the company offered options allowing users to stick a label on “extra-important” posts for $1 or “pin” posts for $5; it subsequently disabled both features. Meanwhile, a competitive site, Pinterest, had popped up out of nowhere offering a similar image curation service but with an obvious profit engine (driving users to e-commerce sites and charging a toll for the service) and a mammoth valuation to show for it: $2.5 billion as of February.

“Pinterest ate their lunch in a lot of ways,” said one person close to the company, who suggested that the timing of that valuation may have pushed Tumblr further along toward the road to an exit. Early 2013 was a fragile, scary time for the company, and while Karp was loath to muddy his platform with ads—it “really turns our stomachs,” he said in 2010—he also didn’t have much choice. In April, mobile users began to see promotions pop up in their dashboards. Ten days after the acquisition, Tumblr expanded those ads to hit desktop users as well. It was the first decision Karp made that prioritized revenue over the user experience; in a way, his first real decision as CEO.

When asked when he expects Tumblr to be profitable, the CEO hat comes off. He doesn’t know, Karp said recently at his office; profitability “has never been a particularly important milestone” to him. “My philosophy toward that has always been, like, the guy on the corner selling fruit is running a profitable business. There are many profitable businesses out there. There are only so many very large networks.” He’s confident that “if the media network supports the creators, then the creators will make that their home. They’ll build an audience, and more creators will show up to reach that audience. More creators will see it as the land of opportunity for them to bring their work. And then an even bigger audience will show up.” He flung his arms out to their full wingspan for emphasis, smacking the laptop of a person sitting next to him. “That,” Karp said, “will make Tumblr important for a long time.”

Karp is fond of comparing his company to YouTube, noting that both “are really supporting creators and building big audiences without ever asking for permission.” Transitioning relatively quickly into a serious moneymaker, as YouTube did after being swallowed by Google, would be a best-case scenario. But Tumblr is now officially an advertising platform, and advertising platforms live and die by their fickle users. It is easy to think of sites—MySpace, Friendster—that gained and lost millions of them overnight. There is also the not irrelevant matter of Yahoo’s rotten acquisitions record, which is cluttered with duds like Geocities and ­—both sold for billions, both now ghosts that simply redirect to Yahoo.

At noon on a recent Friday, Tumblr employees seeped into the office’s communal area for their weekly All Team Meeting. It was a familiar crowd of startup workers: frail young men in Vibram shoes, frail young women with pixie cuts and statement nails. All had the unweathered complexions and drooping posture of indoor plants, including their boss, who kicked off the meeting with updates on ad accounts (cool stuff), new projects (super-exciting stuff), and notable press mentions (some really incredible stuff). Twenty minutes in, the building’s fire alarm went off in the middle of a PowerPoint slide about some pretty awesome stuff done by Tumblr users, and everyone laughed. Karp, dressed in a red plaid shirt, moved the meeting right along—a model of executive efficiency. Or maybe distractedness: Ten minutes later he cocked his head and asked, “How long has this fire alarm been going off?”

Everyone laughed again, but this time in a way that was reverent, and that captured the quality that best explains how a drone-piloting 27-year-old can lead the most successful start-up in New York. If charisma is rare in humans, it is practically nonexistent in blogging platforms, and charisma is how Tumblr has won the game. The little red hearts and infinite GIF streams and fuck-yeah-everything add up to something very precious to its users, and it’s this same precious something that makes Karp an idol to his employees.

Joining the meeting that afternoon was Chris Poole, who founded the website 4chan but had stopped by Tumblr’s meeting to talk about his current venture, an image-sharing website called Canvas. Karp, who left the Bronx High School of Science after his freshman year, cheerfully introduced Poole to the Tumblr workforce as a “fellow dropout,” to which Poole fired back, “I dropped out of college twice. Beat that.”

Bona fides notwithstanding—and dropping out is definitely a bona fide—Tumblr’s employees didn’t seem particularly interested in Poole. Instead of listening fixedly to the visitor’s spiel, as Karp did, their attention wandered to the catered lunch of hamburgers, to their Instagram feeds, to their seaweed snacks.

In addition to being nerd royalty, Karp and Poole have a lot in common: They are both in their mid-twenties, both grew up in New York, both created magnificently robust online communities without necessarily intending to. But as they chat, it became clear that Poole lacks the magnetism that Karp has cultivated, in his own fashion, over the past couple of years. Poole’s vision, or maybe his delivery, felt small. He didn’t read as CEO material. Somehow, Karp does.