Changes at MT, Blogger Highlight Blog Hosting Strategies

Last week saw a gravity shift in sentiment towards two blogging pioneers, Movable Type and Blogger, which each unveiled major news. At the heart of their divergent fortunes are the two companies' decisions about hosting and its role in blog-related business models.

Google's relaunch of Blogger was hailed as a welcome update of what was once the biggest blogging service. But Six Apart's launch of Movable Type 3.0 turned into a public relations fiasco, as a new licensing structure quickly eroded the goodwill - and perhaps the user base - for the popular publishing tool.

The weblog hosting niche has traditionally been dominated by free hosting services. Blogger was the biggest, and its purchase by Google in early 2003 marked the first major corporate interest in blogging. But then ... nothing. The service stagnated, and many of its most visible weblogs bolted for competing services and tools with richer feature sets. When the new Blogger was unveiled Monday, it featured a redesign and new features that helped Blogger catch up with rival platforms. The relaunch earned favorable reviews, as well as widespread coverage from the Google-happy media.

Google's only other major change to the service came last September, when it ended the premium Blogger pro service and rolled those features into the free Blogger accounts. Since Google makes 95 percent of its revenue from advertising, Blogger's value is measured in eyeballs, not hosting income.

Sorting out pricing issues is trickier for Six Apart, whose business model involves both blogging tools and hosting services. The launch of Movable Type 3.0 Thursday brought a case of sticker shock, as users of the popular shareware publishing program objected to new licensing fees ranging from $69 to $599. Many said they'd switch to open source blogging tools, such as WordPress and Drupal, whose web sites quickly zoomed up the blog traffic rankings.

The price hikes for MT 3.0 were destined to spur complaints from the price-sensitive blogging community. While many bloggers profess their enthusiasm for Movable Type, few seem willing to pay for it. Six Apart makes just 38 cents per download of Movable Type, according to CEO Mena Trott, who authored MT with her husband Ben.

That's one reason why Six Apart's first commercial venture was the launch of blog hosting service TypePad, rather than an update of Movable Type. Each TypePad user pays between $4.95 and $14.95 per month for the service. Automated, template-driven hosting apps such as TypePad are easier and cheaper to manage than traditional shared hosting accounts, which allow users to install CGI scripts that may cause performance and security issues - which in turn lead to higher support costs.

In announcing the new license structure Thursday morning, Mena Trott predicted that "based on surveys and user feedback, we are fairly comfortable these licenses will meet the needs of over 85 percent percent of our current users." Either the surveys and feedback were off base, or the unhappy 15 percent is making 85 percent of the noise. By Friday night Six Apart was apologizing to its beta testers, who had already shifted their blogs to the new software, and were apparently blindsided by the new pricing. By Saturday morning, the licensing terms were being "clarified" in response to user concerns.

Six Apart's pricing for MT 3.0 appears to have been influenced by two hosting-related concerns: steering MT users to the more profitable TypePad, and licensing MT for use by other hosting providers. The $69.95 price on the cheapest MT license costs more than a full year of TypePad hosting, which offers far more features.

Six Apart's dealings with hosting companies have been complicated by the development of TypePad. "In preventing web hosts from offering Movable Type for a fee, we had to put a pretty strict blanket clause on our licenses to cover all cases when compensation was earned," Mena Trott. "With 3.0 we have revised our licenses and pricing structure to address this issue." Six Apart said it is in discussions with hosting companies and expects to announce partnerships shortly.