LiveJournal Sale May Revive Six Apart

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Aside from the professional blog software Movable Type, hosted blogging software TypePad, and free ad-supported blog site Vox, there was LiveJournal, which hosted a different demographic and was built on a different code base and platform that the company never updated. "I think the world of LiveJournal, but we felt like we needed to figure out our focus," Alden says. "It's all about [Six Apart] growing up."

Six Apart isn't a badly run company; it has just become unsexy amid newer Web 2.0 names. That's in part due to a brand affinity problem: People may know and love Movable Type or TypePad, but they may not know those brands are part of Six Apart—the way people love TurboTax but have no carryover feelings for Intuit (INTU).

But Six Apart has a lot that new entrants don't have. Exhibit A: revenue. The bulk of the company's sales come from software and tools purchased for a fee. These products power some 20 million blogs posted by customers as varied as Condé Nast Publications and Procter & Gamble (PG). Six Apart expects these products to keep growing, but it's also hoping ad revenues from free sites such as Vox will spur startup-style growth. (Expect more on this in the coming months, Alden suggests in our interview.)

Promise Fulfilled?

Of course, these aren't the only potential questions from the announcement. Was it a mistake to buy LiveJournal in the first place? Did Six Apart blow a chance to build what could have become an early Facebook? The biggest question by far is whether Six Apart itself will end up on the block. Before hiving off LiveJournal, Six Apart was an unnatural acquisition candidate with its many diverse businesses. Now a deal could make far more sense for either a media empire or even a software company such as Adobe Systems (ADBE).

Alden's job is to steer through all these what-ifs and prove Six Apart can be big enough to go public one day. Squarely on his shoulders is the promise the company has always had to build the first really sizable business derived from the blogging trend. Competitors including WordPress and Google's Blogger have impressive user bases, but as free tools, revenues and profits are less solid.

Alden has no excuses. Six Apart has a business model. It's roughly breaking even and now it has focus and a pile of new cash in the bank. My take: This is just the preamble. In the next year, we'll either see bigger, bolder moves by Alden or we'll see Six Apart sold to the highest bidder.

Sarah Lacy has been a business reporter for 10 years, most recently covering technology for BusinessWeek. Her book, Once You're Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0, will be published by Gotham Books in May, 2008. She is also Silicon Valley host of Yahoo Finance's Tech Ticker.