Movable Type Now Free - Now What for Six Apart?
As many have reported today and yesterday, Six Apart has open sourced Movable Type, their flagship blogging tool. Adding to this was the news from last week that they sold their LiveJournal property to SUP, a Russian software company. Six Apart purchased LiveJournal just two years ago in 2005 and grew it to be one of the largest blogging platforms on the Internet. Individually, these moves might simply be interesting, but together they seem to indicate rough times ahead for Six Apart.
Without a doubt, Six Apart is strengthening their product portfolio, and in this case their portfolio is TypePad and Vox. Both products, along with LiveJournal, are part of the hosted blogging market where a company (like Six Apart) manages the blog systems in a transparent fashion for customers. In the case of TypePad, customers pay a monthy fee for their blog, while LiveJournal and Vox are free. Hosted blogs are popular because customers who lack technical sophistication (most of the market) can get online quickly and without a steep learning curve.
Movable Type, on the other hand, is unhosted. Customers purchase the software from Six Apart and then download and install it on their own servers. By open sourcing Movable Type, Six Apart has decided to give away the software for free. Ironically, by not taking this step in 2004, Six Apart lost the broader unhosted blogging market to WordPress and other open source tools while simultaneously making it harder for them to be taken seriously in the hosted market as well.
To understand what happened, we have to go back in time a bit to when invading Iraq was still the hip thing all the cool countries did and John Kerry was someone people took seriously — a time called early 2004. Movable Type was the unhosted blogging platform and its control over the market was nearly absolute. Movable Type was not the first blogging platform, but it was arguably the best. Of course “best” wasn’t all that great as this Kuro5hin post so effectively pointed out, but Movable Type’s legions of loyal followers were rabidly excited about blogging as the next great form of online media.
This all came tumbling down when Six Apart made the decision to no longer offer Movable Type for free when they released version 3.0. Suddenly thousands of bloggers were forced to pay for the platform they had been using to pontificate on the web — a place where nobody in their right mind pays for anything. Some ponied up, but the true mind share for Movable Type vanished overnight. And what upstart open source blogging tool was standing by, ready to accept these lost weary bloggers? Why WordPress, of course.
WordPress now has an enormous ecosystem of users and developers (many of them disgruntled former Movable Type users), and no question exists that it is one of the most sophisticated blogging platforms available. Movable Type is still popular in the enterprise space, but in truth there is only one serious Movable Type customer in the world: Six Apart. The largest Movable Type blog in the world is TypePad, and TypePad is the key to both Movable Type and LiveJournal.
With any technology company in Silicon Valley that’s both successful and still private, all one has to do is follow the money — the VC money. All VCs want a return on their investments, and that means their portfolio companies must “exit” by being bought or IPOd. Six Apart is no exception with investors like August Capital, Intel Capital, and Focus Ventures. Between their Series B round in 2004 and their Series C round in 2006, Six Apart has raised at least $22 million.
VCs always want their money back, and activity like this suggests that Six Apart is prepping for an eventual sale. TypePad is likely profitable given that it has large numbers of paying customers, and because Six Apart built Vox from the ground up it’s likely making money as well. LiveJournal, on the other hand, was supposed to receive a new advertising platform a year ago, but it probably didn’t make a dime and was likely an under performing asset. The capital from selling LiveJournal will almost certainly fund much more profitable projects for Six Apart and TypePad.
That leaves Movable Type. Six Apart must certainly be feeling the pressure from WordPress and other free competition. Not only is WordPress a strong unhosted product, the people behind it founded their own company called Automattic to provide hosted WordPress blogs at wordpress.com. Right now, they have almost 2 million blogs, all using WordPress as a platform. Automattic just took a $50 million funding round and apparently turned down a $200 million buyout offer not long ago.
To keep the TypePad ecosystem strong, Six Apart must start replicating the kind of success Automattic is having with WordPress. That means cultivating a strong ecosystem of developers to create innovative and useful plugins and other tools for Movable Type — software that can be used to strengthen TypePad as a platform. This won’t be easy because a happy WordPress user is not likely to switch platforms (most bloggers started writing after 2004 and have known no other platform besides Wordpress).
However, Six Apart practically invented the idea of blogging software ecosystems, and Movable Type had a thriving community of plugin developers long before WordPress became popular. For Six Apart, the key must now be to reclaim some of that lost community interest and regain their footing. This time it won’t be so easy.
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