XKCD's Geocities tribute (Photo: Inquisitr)

At yesterday's Ad Tech New York conference, Union Square Ventures investor Fred Wilson dismissed the notion that Tumblr will go the way of GeoCities. Mr. Wilson should know: he invested in both.

Although the two platforms, which both grew out of empowering community and self-expression, may share a similar trajectory--explosive traffic, scads of funding, sky high valuations--he argued that Tumblr has modern social media's emphasis on the news feed (for elegance of consumption) combined with a different approach to advertising. 

No kidding! Geocities couldn't stop itself from slapping on ads, alienating users without delivering for advertisers. "The performance and appearance was ugly,” Mr. Wilson said.

Tumblr founder and CEO David Karp, on the other hand, has changed his tune over the years from a distaste for advertising (it "turns our stomachs") to defensive. Last year, he told Chris Dixon, "Making money off of Tumblr would be incredibly easy,” and that an AdSense ad on the dashboard of every Tumblr user would make it “wildly profitable." But he's holding out for revenue-generators that “enhance the experience for our users.”

Unlike GeoCities, Mr. Wilson noted, lower development costs have bought Tumblr, which was founded in 2007, more time to figure out a better model. Reporting from the conference, GigaOm says:

But the Tumblr approach also reflects lessons learned from the Web 1.0 era. Wilson says one of these is that scale must come before monetization: if a company focuses on advertising too soon, chances are that it will build a faulty product that will never scale.

With 20 billion pageviews a month, Tumblr seems to have the scale thing under control. So about that monetization? Like much of New York tech and media these days, Mr. Wilson is putting his faith in "native advertising," the same concept Mr. Karp pitched to execs at Advertising Week:

“If you just slap up some generic ad format, people tune it out and it doesn’t perform,” he argues. “People don’t hate advertising. They hate bad advertising, interruptive ads or poorly targeted ads.”

Wilson thinks sites should follow Twitter’s lead and ensure ad content is the form of an atomic unit that mimics the native content – a tweet on Twitter, a video on YouTube and so on. For the advertiser, the formula is to develop great organic ad content and then pay the platform to promote it. (It should be pointed out that Wilson has stakes in both Twitter and Tumblr; still, the observations seem sound).

Design-forward native advertising definitely meets the pretty standards of the new web exemplified by Tumblr and upstart competitors like Svtble. The only question is: can they perform better than the hideousness they replaced?

So it goes.

Click through the slideshow to see some of our favorites.

We're gonna party like it's Geocities time!

It would be easy to assume that 1999 is the kind of year Fred Wilson would like to repeat.

In January of that year, Yahoo bought the web hosting service Geocities. Wilson and his first firm, Flatiron Ventures, were an early Geocities investor.

1999 was near the peak of the dot-com bubble, and Yahoo paid a staggering $3.57 billion for Geocities. The $8 million Wilson and Co. invested in Geocities in 1996 was worth $234 million after the Yahoo purchase.

"It was the first rocket ship ride I had in the venture business and it will always have a special place in my head and heart because of that,"Wilson wrote on his blog, A VC.

1999 popped Wilson's cherry with a big exit, but it's not a rocket ride he'd care to take again. "When I look at where we are right now, it reminds me so much of 1999 and frankly it scares me," Wilson wrote  over the weekend, continuing to hammer home the point that there is a bubble building in tech investing, especially for consumer facing web services and mobile apps.

Couldn't Wilson look at this as an opportunity? After all, in this frothy market, an investment like Foursquare could easily sell for a high price. Who wouldn't mind hitting another home run?

Wilson's issue is that he's in the game for the long run, not  a single inning. And the bubbles which produce big exits also make it hard to generate good returns over time.

"We made greater than 5x on that first fund," Wilson wrote. "Eleven years later, we will be lucky to make 2x on the $350mm second fund."

Still, Wilson says he's not going to sit by the sidelines, like he did back in 2000. He doesn't think it's possible to time the markets. The best strategy, he's now decided, is to keep a steady pace, investing slowly and carefully, trying to spread his bets out over the unpredictable cycles of tech boom and bust.