Microsoft does not enter markets to come second. Microsoft only enters markets with the intention of not only becoming the leading vendor, but the dominate vendor as well. In 5 months Microsoft has gone from 0 blogs to over 7 million blogs and counting. In the same period (29 Nov 04-26 Apr 05) SixApart’s LiveJournal increased their number of registered users by 1.7 million yet its active user count increased by only slightly over 300,000. A potential 1.4 million users stopped using LiveJournal during that period, and potentially went elsewhere. Given the fickle nature of the teen market, the core market that is targeted by both LiveJournal and Spaces, that looks more at popularity and the latest “in?? thing, it’s fair to presume that the growth in MSN Spaces, and the integration with the popular MSN Messenger, is not unrelated to the loss of active users from LiveJournal.
The continued growth of Spaces risks the long term future of LiveJournal. Any blog player that reaches in excess of 10 million users, as MSN Space’s is about to do, will surely reach a point of critical mass in its particular market where it becomes the dominate blog player of choice. Differentiation may work in niche markets, but in the teen market this is not the case. With more and more of their peers signing up, teens through out the English speaking world will be wanting a Spaces blog, just like they want an iPod or a mobile phone.
Even though Yahoo! has launched Yahoo! 360, might it still be a possibility? The Blog Herald thinks so.
The future for SixApart is in its intellectual property, and its sale to a bigger player. And for this there are two, or maybe three likely suitors. Yahoo! is the obvious choice. Yahoo! has a history of buying companies in areas in which it lacks expertise and wishes to acquire additional users in a particular field (Broadcast.com and Geocities spring to mind). The time period for SixApart to remain attractive to Yahoo! is limited as Yahoo! continued to develop its own blogging platform. The last two potential suitors have the financial backing and brand exposure that would allow SixApart to continue to compete against the big 3.
As much as I love what Six Apart have done with MovableType, TypePad and now LiveJournal, there is no denying the threat Microsoft poses with Spaces. True Six Apart offers a superior blogging experience with better technology and all that but there is a lot to be said for the numbers Microsoft carries and its growing momentum. Personally, I would love to see Yahoo! buy Six Apart, it would really bring a few of my personal online services together nicely.