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Anyone remember this promise LiveJournal made to you back in Apr. 2004?!
We stand firm in saying that we will:
Stay advertisement free
garner a lot of money, but nonetheless, we promise to never offer advertising space in our
service or on our pages.
What about this supposed principle to "Avoid banner advertisements", which is shown on archive.org, but has since mysteriously vanished?
Avoid banner advertisements
As it's one of our larger pet peeves, we have avoided putting banner advertisements on the site. Although our Terms of Service permits us to change our policy in the future, we've found throughout the past few years that our "paid accounts" business model has, so far, made banners ads unnecessary.
Or perhaps it's worth mentioning the now ironic satire of the April Fool's joke of just last year...
"Take banner advertisements, for example. Some may say that they are evil. I say that they demonstrate a strong ability to strengthen cost-profit ratios. Some say tomato, others say tomato."
I guess we're *ALL* April Fools now, eh?
When LiveJournal was sold to SixApart, I told people what the worst case scenario was:
"The economy continues to struggle, Six Apart and its 70+ paid employees never achieve a profit -- like most dotcoms -- and they go under, taking LiveJournal with them. LiveJournal may not have been as big as Six Apart, but one thing they were was financially secure and completely self-funded... unlike SixApart, which has yet to make a single penny's worth of profit.
SixApart/LiveJournal have gone on a hiring frenzy this year, and have presumably dipped heavily into their venture capital funding to do it. Admittedly, the venture capital market smiled upon them, because technology companies have performed so badly lately, a growing, popularly hyped phenomena like blogging and social software sites had the kind of buzzwords to attract investors. That said, their investors may not have expected SixApart to blow through so much money, so quickly, and if this economy gets worse, there is a real risk of additional funding drying up. (Why is the price of oil and gold going through the roof? Because that's where investors are putting it.)
Now, we all know what happened to the overhyped dotcoms back in the late '90s/early '00s. The economy hit a pothole, the additional money they expected never arrived, and they died a painful death. Well, the truth is, today's economy is worse than in the late '90s by any measurable sense of the word. It could get very bad indeed, and to run a business without taking that into account is simply irresponsible.
I'm here to tell you today that LiveJournal is, in my opinion, no longer profitable, even if viewed by itself, seperately from the rest of SixApart. It's grown too fast, hired too many people, and is almost certainly an unprofitable enterprise. Worse still, the money it does make -- and that you are paying out for every year -- is helping to pay the salaries of all those working on the TypePad side of SixApart, which still has failed to achieve profitability.
Doubt me? I challenge SixApart to open up their books to an independent auditor and show us and its investors otherwise. I'm so certain of this, that I am even willing to pay any costs for the audit myself.
I let it be known that the sale of LiveJournal was a risky act of venture-funded speculation which would make the future of the service less secure because of SixApart's lack of profitability, and that LiveJournal's previous promises to its users "may mean nothing a year down the road". Well, here we are, a year later. Were those promises kept?
Whether you are a paid user, a permanent user, an early-adopter, or a free user, there are numerous reasons to dislike this ad plan:
1> When you give potentially hundreds of thousands of people access to many of the paid features, you are putting a much greater server burden on those features... many of which don't work reliably even now. For instance, one of the paid features that are planned for ad-sponsored accounts are directory searches. But try doing a search even now for users in (insert city and state) interested in (insert hobby)? Go ahead, do it now. What?! The search is taking a long time to complete? Or maybe the pictures don't load very rapidly for you? Hey... me too!
Likewise, you can expect that images hosted on LJ will take longer to load, and that other paid features will potentially lag more. It's quite possible that server load on these kinds of paid features will double in short order. That could easily make the difference between something not working all that well and something not working at all.
2> Paid features that you might currently take for granted, such as the ability to link to your LJ-hosted images on sites other than LJ, might be taken away in the future because they are being made available to anyone willing to accept ads on their journals. Potentially, people can use LJ's image service to host a full gigabyte of images without even having an active account. This free, unpaid for service would be publically available to all spammers, adult site owners, pedophiles, and basically anyone on the Internet who wants free, anonymous image hosting. This could greatly increase the burden on the image hosting service, and could also lead to censorship, as LiveJournal users who post images intended for a select group of LiveJournal users find their pictures deleted or accounts flagged for hosting images, in the same way that users of many other image hosting sites are.
3> While free users don't have to view ads on their journals, they *WILL* have to view ads on the journals of ad-sponsored accounts. The truth is, free users will routinely be exposed to ads via LiveJournal.
4> LiveJournal is targeting these ads based on the interests listed by users, but the use of this kind of data for delivering ads is prone to considerable error. You could be interested in vegetarianism and restaurants and get ads for "Outback Steakhouse". You could be interested in "Iraq" and "nonviolence" and get Army recruitment ads, you can be interested in "BBWs" and "fat positive" and get ads for Weight Watchers. Is this really what you want, or what you want to expose your friends to?
5> SixApart says that they will not give away our personal information except "with our service providers and vendors in connection with the operation of the service and our business, where we think it is appropriate . . . or if the business is being sold or reorganized." How is this in any way a promise to protect our personal information at all, either now or in the future? Isn't providing a user's interests to an advertiser giving away personal (and often valuable) information, if not specifically about that user, then at least in aggregate? Can a user "opt out" of providing their personal or aggregate information in any form that might eventually be used by advertisers, data miners, or other unwanted entities?
6> If you get rid of rules against ads on some journals, you invite them on others. In fact, SixApart has already mentioned that there are plans for encouraging an ad-driven culture of paid accounts too. (Some people will do anything for a few extra user pictures, I guess.) There is even talk of allowing paid users to independently host ads on their journal, which is something previously not allowed. And if they can do it on their journal, why not in their posts... and, therefore, in your friends list?
7> If you're a paid user, you won't see whether or not there is an ad on any given LiveJournal site, but if you link others to that site, they'll see it. Do you really want to do that?
8> It further balkanizes and diminishes the site's sense of community. LiveJournal is rapidly becoming a closed, gated community of "friends only" journals. Creating a whole community of ad-supporting users would cause further balkanization and seperation, with some users and communities choosing not to associate with ad-supporting users. (I know I'll avoid them, whenever possible.)
9> It sets a bad precident. SixApart previously agreed to "avoid banner advertisements" because LiveJournals existing business model made them "unnecessary." We must ask them this... why did they change this policy? What prevents them from changing any other supposed "principles" they hold in the future? What new circumstances exist which makes this policy absolutely necessary for LiveJournal users, to such an extent that SixApart can no longer avoid serving us ads?
10> It's potentially bad for business. I was there when LiveJournal hosted banner ads before briefly, back when the site only had about 15,000 members. While the banner ads did raise a *VERY* small amount of money (we're talking only a few bucks...) they also decreased site growth by approximately 30%. People opted to use other services, because their first impression of LiveJournal was seeing someone's site with a banner ad on it. LiveJournal's history of success is based upon a "free, but paid" business model, specifically intended to promote growth, because site growth allows the site to scale and for overhead to decrease, allowing LiveJournal to spend more of its money on doing what you really want them to do -- improving the site. Adding a large influx of business reps, marketing personnel, and ad execs does very little to improve your LiveJournal experience, and often creates a self-perpetuating bureaucracy... so why would you want to pay for it? Remember, LiveJournal is *still* a pre-IPO startup that could go bust. Shouldn't you desperately want them to be lean, mean, and focused on profitability instead?
11> It simply isn't necessary, and SixApart has done nothing to show that there is any need to violate their pledge to "avoid banner ads". In fact, I suspect that SixApart's new ad scheme is largely a waste of money. According to LiveJournal's own statistics, there are currently only 1,301,145 users who have updated in the past 30 days. These users are only about 8% of the total user base, but they probably make up over 90% of the site's traffic. If you subtract paid users from this total, you're left with about 1,000,000 users as a viable target market for ad-supported journals. Of that total, it would be optimistic if one-in-eight of those users opted in for ads, or approximately 150,000 users, whose journals are soon going to be a helluva lot less popular with other LJ users in the future. How SixApart intends to use such a low number of ad-bearing accounts to reliably pay the salaries of the third-party, tracker-installing biz people and the "ad people" that SixApart have hired who "don't necessarily understand LiveJournal users yet" is far from clear.
(I'm sure there are other potential -- and largely unavoidable -- flaws to this plan. If you can think of any good arguments, please share them in the comments and I'll add them to this post.)
Compare the potential positives vs. the potential negatives, and it becomes pretty clear that this ad-driven plan is pretty risky, unless your priorities are to have more userpics (and ads...) as opposed to a functional, well-working site and business.
What is my answer to SixApart? Keep your promises to your customers. (You know, the promises you knew about and accepted when you bought the site...) Let us know that you have a business plan that takes in to account the potential for catastrophic change, so that if the economy tanks, we'll know you'll still be around. Show us that you have a business plan in place that will guarantee that SixApart is on a rapid course towards profitability, and won't be sunk if additional venture capital funding fails, as it did for so many other dotcoms in the past. If that means cutting back on hiring new people (or, even worse, having to fire your ad guys) then sobeit. You'll be thanked by millions of the site's users. Hell, you'll be thanked by your investors, too!
As for what to do about this course of events, I suggest that all of us who oppose this ad-driven future for LiveJournal speak out loudly. "Friends don't make friends watch ads" banner ads would be a good start. Forming a community and acting in unison with email campaigns of SixApart's staff, support requests, and other acts of polite disobedience would also be a good idea, and could throw a wrench into the plans rapidly, or at least lead to the more odious aspects of the plan to be changed.
So, if you're having second thoughts about all this "great news", and would be interested in working together and contributing ideas to see what can be done to change this situation, leave me a comment, and let's get started. And yes, please do link others to this post. I want to work with others to form a central place where those of us who oppose this idea can share our thoughts and dissent from this unnecessary and damaging betrayal of our trust.
As for me, I do know that I'm likely to defriend people who opt for ad-sponsored accounts, and will avoid linking to any such accounts in the future. Nothing personal. I just don't believe that friends should force ads upon other friends, unless it's necessary. (Yes, even LJ friends...)
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April 19 2006, 12:17:06 UTC 6 years ago
And if things like email campaigns start up I would be more than happy to help.
April 19 2006, 12:35:05 UTC 6 years ago
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April 19 2006, 12:20:05 UTC 6 years ago
April 19 2006, 13:11:54 UTC 6 years ago
One thing that would be useful would be a short and to the point statement explaining why we don't support ads. So that if people are defriended they understand why.
I doubt most people would bother reading this post, no offence to you as the people who are on your friends list most likely will, but something shorter for the people on our friends list would be very useful as an explanation of action.
April 19 2006, 14:03:14 UTC 6 years ago
To me, the longterm, stable profitability of LiveJournal is a serious issue. I see a lot of VC money going into SixApart, and a rapidly growing staff (gotta be over 100 employees by now), but no financial data coming out indicating that it can support those numbers, except through additional rounds of VC funding, much less support that level of growth.
Either way, the amount of money made on contextual ads for, say, 100,000 users (which, btw, would be very optimistic) is really not much to get excited about. Growth for the site of total users might be high, but growth of active LiveJournal users is not looking good at all, really.
1153683 posting in the last 30 days back in June 2004, 1512152 posting in the last 30 days back in March 2005, and 1301145 today.
Truth is, LiveJournal isn't growing anymore. It might have more accounts, but account numbers don't matter. Pageviews do, which actually correspond more closely with regular, active users.
So, if LiveJournal isn't going to make Six Apart profitable, what is? They're trying to roll out "business class" (read: expensive, overpriced) weblogging tools, but how much money is there really in that market? Why not go with some existing business tool that's tried and true, which adds a bit of "blogginess" to their software?
I heard rumors that Six Apart doubled their revenue in just one year, but that doesn't mean much when they've quadrupled their staff, and considering where they were starting from. 2 x not much = still not much.
The question is, did Brad hitch his wagon to a star, or to a dead horse?
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April 19 2006, 14:16:10 UTC 6 years ago
I know, at least, my friends won't be doing, mostly since only two are active users, and only one of them would even care about the features, and not enough to allow ads.
The next thing I thought was that this could turn into MySpace, and that site is very very ugly. I'll definately send an e-mail or two expressing my disgust at this decision
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April 19 2006, 23:21:50 UTC 6 years ago
As I understand it not entirely, anyone who views the site that isn't logged in at the time will see the adverts. There isn't much they can do to stop that but if they wanted it to be entirely opt-in then ads should only be shown on the pages of sponsored users and only such users could see them.
Because of this people who choose not to be exposed to ads will have to become a paid user. Hence it is really a tariff on avoiding adverts. A betrayal on both parts I'd say.
April 19 2006, 15:09:21 UTC 6 years ago
What keeps them from re-defining what an EA account is?
How will this effect me when I view my friends page? I mean, look at all that tasty blank space around were my friends names and user pics are. If they aren't all paid or EAs, will I being have to put up with blinking, talking, animated mortgage ads??
This is crap. I've been on for 5+ years.
I'll be watching and helping where I can.
April 19 2006, 16:20:08 UTC 6 years ago
The real difference is when you click through to a person's page, or leave a comment in that person's journal. And, of course, any difference you might experience in level of service, because all sorts of formerly free users are now using LJ to host their images, etc.
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April 19 2006, 15:14:33 UTC 6 years ago
Since my potential reaction is to strip my interests list bare, and that is the opposite of what this place was for, count me in.
April 26 2006, 16:38:16 UTC 6 years ago
April 19 2006, 16:33:44 UTC 6 years ago
April 19 2006, 16:35:09 UTC 6 years ago
But with the ads, how/when would a non-ad person see ads? I had thought that the only person who would see ads anywhere would be someone who signed up for the new account level, why would anyone else see ads even on this person's journal?
April 19 2006, 16:42:13 UTC 6 years ago
If I had ads and you clicked through to my journal and left a comment, you could expect to see ads on both my main page and my comment page.
April 19 2006, 20:10:18 UTC 6 years ago
Incidentally, for Worst Case Scenario planning, what's the best method or tool you've found for archiving your LJ posts? I've been on here for years, and I just started thinking recently that if anything ever happened with LJ, I would be pretty wrecked to lose all that permanently.
April 19 2006, 21:54:24 UTC 6 years ago
LJ Archive
I'm currently usingApril 19 2006, 20:36:32 UTC 6 years ago
One thing which I think no-one has touched on: In my circle, it is very, very common for the slightly better-off people to buy a month or several of paid time as a gift for the less well-off.
I think a lot of that will disappear if the less well-off can now get a sponsored account and get most of the benefits of a paid account.
April 25 2006, 14:19:03 UTC 6 years ago
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April 20 2006, 02:29:31 UTC 6 years ago
I'm cringing because I can see our journal content becoming used as advertising fodder, like Google currently does. You search Usenet archives for a post by me (Stacia) and it shows you ads for some singer named Stacia's music. Bleah.
April 25 2006, 14:18:20 UTC 6 years ago
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April 20 2006, 06:50:03 UTC 6 years ago
I simply do not see any effort on their behalf to avoid this, especially when all the info I have indicates that it could easily be avoided.
6 years ago
April 20 2006, 06:39:27 UTC 6 years ago
ADVERTISEMENTS AND PROMOTIONS
You understand and agree that some or all of the Service may include advertisements and that these advertisements are necessary for LiveJournal to provide the Service. You also understand and agree that you will not obscure any advertisements from general view via HTML/CSS or any other means. By using the Service, you agree that LiveJournal has the right to run such advertisements with or without prior notice, and without recompense to you or any other user.
Your account can be terminated immediatly if you obscure any ads. Lovely, eh?
April 20 2006, 07:16:01 UTC 6 years ago
Truth is, LiveJournal may have more users -- it always does -- but an increasing amount of those users are inactive accounts. LiveJournal has been wilting on the vine under SixApart's administration thus far, and their only answer to this seems to be questionably profitable advertising.
It would've been nice to see them concentrate the amount of time and money they appear to have spent on this initiative to adding new paid features instead, and improving the level of service.
As far as getting free users to transfer over to a revenue-generating status, there are better ways. The amount of revenue that a single -- most likely new and inexperienced -- LJ user will generate in a year with popup ads is negligible compared to the $25 a year a free user generates, and most of the time, new users simply aren't knowledgeable and prepared enough to use paid features anyway.
It would be an interesting experiment to offer free users something like a 60 day trial membership after a few months of using the site. Don't give it to them immediately, as that would encourage users to create a series of accounts, but give them a taste of paid features later on and see if you can't get their attention then.
I suspect that simply increasing the transition rate of free users to paid users by a few percent would more than make up for the revenue "lost" by not running banner ads.
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April 20 2006, 07:47:20 UTC 6 years ago
Is there any convinient way of backing up all the old entries without simply having to go back to each one and copying and paste them myself onto a word doc or something . (A comment up there about the archive did say that it only ran on Windows and I run on Mac OS X)
April 25 2006, 14:17:31 UTC 6 years ago
April 20 2006, 14:48:26 UTC 6 years ago
April 25 2006, 14:17:06 UTC 6 years ago
I don't want to fight this one alone, but I think it would be good to point people towards a place where they can work together to discourage a further descent down the slippery slope.
April 21 2006, 19:10:42 UTC 6 years ago
right!
i was LIVID when i heard about it and consider(ing)ed leaving here altogether.if there is some plan to make them stop this madness I am all for helping out.
April 25 2006, 14:16:54 UTC 6 years ago
Re: right!
You may want to check outI don't want to fight this one alone, but I think it would be good to point people towards a place where they can work together to discourage a further descent down the slippery slope.
April 24 2006, 11:30:13 UTC 6 years ago
Livejournal is a sacred space for me, and although I am a paid user, it bothers me that some of my friends will see ads on the site.
April 25 2006, 14:15:27 UTC 6 years ago
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April 24 2006, 22:21:54 UTC 6 years ago
So thanks!
April 25 2006, 02:13:48 UTC 6 years ago
April 26 2006, 06:33:18 UTC 6 years ago
Excellent points.
Thank you.
April 26 2006, 14:25:01 UTC 6 years ago
This is very informative. I was skeptical that the ads would actually increase their revenue, and your analysis confirms that fear. Another problem I see with ads is that they're going to be seen mostly by people who don't or can't pay for livejournal... those people seem like they'd be the least likely to be internet shoppers. (Also consider that the largest group of users is 16-20 years old - not a demographic that has tons of spare cash or necessarily even credit cards.)
I just checked the stats page and "updating in last 30 days" is now down to 1289993... Do you know if there's any way to find out the number of Pageviews? And are there *any* numbers coming out about SixApart and LJ's financial stability?
April 26 2006, 16:36:28 UTC 6 years ago
The pageview information used to be part of the stats, but they yanked that from the public data. The raw data for public stats is here, and it indicates that the data was last available for the public on Mar. 11, 2003.
As for numbers coming out of 6A's financial stability, the best info I've heard is from a venture capitalist who mentioned something about it on their blog. They said that the total revenue doubled in the last year. That's good, but the number of new employees probably quadrupled in that time period.
Doubling revenue doesn't necessarily mean much, considering that 6A's TypePad was such a new service when they bought LJ. Doubling revenue could simply mean that they had LJ's revenue to add to their total, frankly. It doesn't in itself say anything about their ability to achieve profitability, especially with so many employees.
April 26 2006, 20:07:05 UTC 6 years ago
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