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Folksy No More, Blogger Firm Taps Big Clients
By VAUHINI VARA
Staff Reporter of THE WALL STREET JOURNAL
October 12, 2004; Page B1 (C) 2004 WSJ
Last year, Ben and Mena Trott were mingling at a fund-raiser in the San Francisco Bay area for former presidential hopeful Howard Dean when a young man rushed over to them.
“You’re Ben and Mena! You guys rock!” he gushed, ignoring Mr. Dean and celebrities like film director Rob Reiner, who were standing nearby.
The husband and wife team — both 27 years old — are founders of Six Apart Ltd., which makes a blogging software called Movable Type. They may not be rock stars, but in the world of Web logs they are treated as if they are.
Just three years ago, the couple had more humble beginnings. When they first offered Movable Type, their typical customers were teenagers who wrote at length about their most recent breakups. The couple ran Six Apart from the spare bedroom of their San Francisco apartment, and the software could be downloaded free.
Now, Movable Type has become so popular — thanks to its simple interface and variety of design options — that the latest version was downloaded 20,000 times the day it was released last month. By comparison, Mr. Trott estimates the software was downloaded 800 times the day the first version was launched three years ago.
Yet as the Trotts build their business, they can’t count on the hipness factor anymore. They’ve ditched the home office in favor of a San Mateo, Calif., office building and hired nearly 40 employees — including a Silicon Valley veteran as chief executive officer. (Ms. Trott remains president while her husband is chief technology officer.) In May, Six Apart began charging users with multiple blogs for a software upgrade. Plus, it’s luring corporate clients, including eBay Inc. and Monster Worldwide Inc.
Some fans see a sellout. “I think this is the moment when, for many people, Six Apart transitions from ‘Ben and Mena’ to ‘The Company,’ ” one blogger wrote.
As blogging goes mainstream, companies that make software for bloggers — many of which are still-unprofitable start-ups — need to find ways to make money. Blogs started as online personal journals, but some have become influential pulpits for pundits, scholars and politicians. Blog-tracking company Technorati Inc. says at least four million blogs exist, up from about one million just a year ago.
Six Apart faces no shortage of competition. At least three dozen companies produce software for bloggers, though many are tiny. Google Inc. last year bought San Francisco-based Pyra Labs and its software called Blogger. According to Technorati, Blogger is the most widely used blogging software, with LiveJournal, owned by Portland, Ore.-based Danga Interactive Inc., ranking second while Six Apart’s products come in third. (Six Apart argues that measure is misleading because many Six Apart blogs, such as those behind firewalls, aren’t measured by Technorati.)
One way for blogging software creators to make money is through corporate customers. Blogging is rapidly evolving into a business tool, as companies adopt the idea of frequently updating postings to connect management with employees and executives to customers.
Last year, Six Apart entered the “hosted service” market — where writers post their blogs on Web sites operated by the software’s provider — with the launch of TypePad. To the company’s surprise, its hosted service became a hit with companies.
Michael Pusateri, vice president of engineering at Disney ABC Cable Networks Group, a division of Walt Disney Co., used Movable Type for his personal blog. Then he realized that technicians in his group could use a blog to update each other daily on the condition of cameras and other equipment. They went with Movable Type software. “It just kind of made sense,” Mr. Pusateri says.
But Six Apart’s moves to operate more like a corporate software company have alienated some longtime fans. Last May, it announced that if individuals wanted to run more than three blogs, they would have to pay for the additional uses. (The software previously had been free for an unlimited number of blogs while businesses paid $150.)
Some longtime users complained that the company was neglecting the people who had made Six Apart successful. “You forgot to dance with who brung ya,” one user wrote to the Trotts on his blog.
Following such protests, Six Apart a month later revised its pricing structure. Movable Type, though still free for three blogs or fewer, now costs up to $99.95 for an unlimited number of blogs. Businesses pay $199.95 to $1,299.95 and up, depending on the number of users.
Still, some Six Apart fans parted company. “A lot of people got upset and decided to switch over to different platforms,” says David L. Sifry, chief executive officer of Technorati. “They lost in terms of market share, but I’m sure they gained in terms of revenue.”
Ms. Trott says Six Apart is “more than happy” with the decision to charge some users. Though the company won’t disclose its revenues, she says sales are rising and corporate customers account for about 35% of Six Apart’s revenue, up from next to zero just a year ago.
The dark-haired duo are high-school sweethearts born six days apart, hence the inspiration for the company’s name. They created Movable Type after Ms. Trott, looking for a way to set her own blog apart from others, became dissatisfied with the available software. Soon, fellow bloggers were downloading the Trotts’ software.
The Trotts insist that they haven’t sold out. “I would hate to use the word ‘corporate’ to describe us,” Ms. Trott says.
Yet Six Apart has started to look more corporate. In addition to hiring Barak Berkowitz, 51, as CEO, the company has received an infusion of cash from venture capitalists; last week, it announced it had received $10 million from August Capital. And in July, the company bought French blogging-host service NOUblog.
Six Apart says it doesn’t want to alienate its core fans, but it will continue to seek a broad array of customers. Sitting in the company conference room, Ms. Trott says a corporate lifestyle has advantages. “He likes that now I dress up for work,” she says half-jokingly about her husband.
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