Six Apart and Live Journal

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Six Apart and Live Journal

I was emailing about this deal this morning with a fellow blogger.

My assertion was it's a smart move, Six Apart gets a low end/free service to go along with Typepad which is the top high end service.

It's also a defensive move to protect Six Apart from the free services taking the market.

It also drastically increases the number of bloggers who use Six Apart's products and services. It's a move for share.

I don't think the free services will take the market, but I think you need to have a free service to be viable long term.

I laid this out in the email. And the reply I got back was - Sure, but where's the business model in all these free sites? How can Six Apart recoup their investment in Live Journal?

I think there's a big advertising opportunity on these free blog sites. With contextual and behavioral targeting technologies, the traffic that these sites generate can be easily monetized.

But that isn't Six Apart's business today. They'll either have to develop it internally or partner with someone to bring that capability, or possibly both.

It will be interesting to see how this develops. I think it was a smart move for both companies.

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» "Completing" Six Apart and Making a Business Case for the Deal from This is going to be big. I can feel it.
In my experience, I think I've gained at least a rudimentary conception of value creation in acquisitions, and how to evaluation acquisition targets. [Read More]

Tracked on Jan 6, 2005 3:23:38 PM

Posted January 6, 2005 in Venture Capital and Technology

Comments

I don't think the LiveJournal audience will appreciate being "monetized". While Typeheads might not mind trading off a column for some dough, I don't think that's really the profile of the average LJer, who might think of ads on their blog the same way baseball fans thought of Spiderman movie ads on bases.

Posted by: Fellow Blogger Charlie | Jan 6, 2005 11:51:46 AM

I don't think anyone realizes.. LiveJournal makes money. Does pretty well. Check out the number of users. See the percentage who are paying for premium membership. Look at the size of LJ's team. Do the math.

Posted by: shh | Jan 6, 2005 12:12:29 PM

LJ is a great place for communicating with friends. Its a social scene that combines the art of long tail economics. Why? Because its the easiest place to get 100 people together with the most unique taste. Where else can you find someone with a collection like this: http://www.livejournal.com/users/pikabellechu/23238.html Its better than six degrees because of the way it can organically grow--its not just about individual LJ's, but about communities on top of journals themselves. And yes, as long as it isn't "monetized" with advertisements, it will continue to make $$.

Posted by: devin | Jan 6, 2005 3:46:33 PM

I like Fred's comment about Six Apart's move as being a defensive move. The tech industry is very interesting in that although Six Apart is so young, the company can make a bold move to leapfrog it to one of the largest in the world (by number of bloggers). I wonder if it was really a defensive move in sheep's clothing ...

Posted by: Steve Shu | Jan 6, 2005 4:27:10 PM

A VC

Musings of a VC in NYC