I’m a big fan of what Tumblr has done over the past few years, replacing Blogger and Typekit as the go-to platform in the casual blogger market and increasingly nipping at WordPress.com on the low end (see disclosure below).

The approach that David Karp articulated at RoadMap this week, one of elegant simplicity, has certainly resonated amazingly well in the age of the curator, and there’s no doubt that this approach will continue to serve the company well going forward.

And while I also agree with Fred Wilson that Tumblr is NOT the new Geocities, precisely because it has refrained from polluting the pristine simplicity of the typical Tumblr blog with a barrage of advertising, I do think that Tumblr should start to figure out a monetization strategy sooner rather than later.

But there’s no rush to figure things out, because Tumblr is not being threatened by another platform today in the casual blogging space. It has that market locked up. But it needs to look for monetization now, because every year that passes is one in which it may lose potential market opportunity as focused platforms continue to grow and become dominant in their various market niches, potentially stealing upmarket growth opportunity for Tumblr down the road.

Take Shopify and Etsy, both of which have had success filling niches in the low-end ecommerce space. Shopify targets a wide range of small online entrepreneurs looking to sell anything from concert shirts and bike parts to digital goods. Others, like Etsy, are targeting the artisan market. Like Tumblr and WordPress, both platforms have taken a template-based approached to web design, and by creating ways for small entrepreneurs to quickly monetize, they are much more likely to ultimately see a paying subscriber (in my opinion, this is a much more reliable potential revenue model than advertising).

Again, I don’t think Tumblr’s biggest threat is being replaced as as the leading casual blogging platform. But by waiting too long it is losing opportunities, particularly in the higher end, as casual users migrate their hobbies into potential businesses online.

Disclosure: Automattic, the parent company of WordPress, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.