LiveJournal Sale May Revive Six Apart

After selling the blogging community site, CEO Chris Alden may have a chance to finally turn Six Apart into a Web 2.0 behemoth

by Sarah Lacy

Don't be fooled by the lack of pomp surrounding the sale of LiveJournal. Late in the afternoon on Dec. 2, a little-known Russian company named SUP said it was buying LiveJournal, one of the earliest online communities built around blogging. The seller is LiveJournal's first acquirer, blogging startup Six Apart.

On the surface, the LiveJournal sale may come across as just another Web deal for an undisclosed sum, the transfer of a social network that—like Friendster or Google's (GOOG) Orkut—is flourishing abroad but getting trounced in the U.S. by rivals such as Facebook and News Corp.'s (NWS) MySpace.

Of course, the news matters greatly to SUP, which manages international franchises of several U.S.-based Web sites and already runs LiveJournal in Russia. SUP will set up a separate company to run LiveJournal in San Francisco. The implications are also big for some 13 million active, rabid LiveJournal bloggers. The new company will devote more money and attention to modernizing the site, launched in 1999 out of Brad Fitzpatrick's University of Washington dorm room.

Applying Lessons Learned

But the announcement has an important subtext. The focus and financial wherewithal bestowed by the deal could help revitalize Six Apart in a Web 2.0 world where its influence has been diminished by newer, flashier upstarts.

Selling LiveJournal marks the first gutsy move by Six Apart CEO Chris Alden, who replaced Barak Berkowitz in September. Alden's Valley claim to fame was starting Red Herring in the 1990s. The experience taught him some hard lessons about raising too much money and getting big for big's sake.

Had Red Herring not become so dependent on venture money, adding reporters by the week and hiring a big-name management staff, Alden believes the magazine would still be in business and worth half a billion dollars—and that TechCrunch, the site run by Michael Arrington that covers much of the same editorial ground but more profitably, wouldn't exist. (He's probably right.)

Alden will apply those hard-learned lessons to his mission of making big business out of the company begun in October, 2001, by husband-and-wife team Ben and Mena Trott.

Streamlining Focus

At Six Apart, Alden previously ran the group responsible for Movable Type, a blogging tool for developers and businesses, breathing new life into the company's flagship product. He'll need to play a comparable role on a larger scale now.

It's a tall order, considering the question marks surrounding the business relevance of blogging in a consumer Web arena dominated by social networking. Alden is not seduced by the sexier Web 2.0 trend of social networking. In fact, he considers blogging one of the earliest incarnations of the community-is-king ethos that imfuses Web 2.0. But he acknowledges that blogging has fallen prey to the hype cycle—what happens to any trend that gets overhyped, then nudged aside when it doesn't change the world fast enough. Consider what happened to e-commerce around the time of the Internet bust earlier this decade. And Amazon (AMZN) is still going strong and the percentage of holiday shopping moving online is expected to rise yet again this year.

Alden will get some assistance proving his theory, starting with the proceeds of the LiveJournal sale. More important is the resulting streamlined focus. Six Apart had gotten bogged down managing multiple products.