CMSWire had a chance to speak with the Russian media company who just acquired LiveJournal from San Francisco-based Six Apart.
Edward Shenderovich is the Director of Strategy for Moscow-based SUP (pronounced "soup" in English). Edward comes from a recent history with Web CMS vendor Quantum Art, and from social networking project Dandelife.
Today he walks through the recent history of the SUP / Six Apart partnership, the future of LiveJournal, and discusses some of the controversy which has been bubbling in the blogosphere ever since SUP first partnered with Six Apart.
Background on SUP and the Deal
CMSWire: On the SUP website, you're listed as the Director of Strategy. You've been around since the beginning. Tell us a little about SUP, its history, and its focus?
Edward Shenderovich: Ok, SUP was founded in 2006. We're a global media company, headquartered in Moscow. We received Russian seed capital. We have global ambitions and our acquisition of LiveJournal seems to be the right step along this way. CMSWire: Generally speaking it appears that SUP is in the business of acquiring media properties, acquiring delivery capabilities for advertising, and then monetizing these properties. Is that an accurate summary? ES: We're interested in exploring different opportunities in the social networking space, in the social media space, and in traditional online media (if one can say that). And we want to explore different monetization strategies, through advertising and other means.
This has been demonstrated by our current setup, where the company consists of four different companies right now -- LiveJournal, Championat.ru - the sports news site, +SOL - the media sales house, and Victory S.A. - an interactive media agency. CMSWire: There's been some speculation that SUP will now pursue an online portal strategy -- like a Yahoo! for the Russian market. Is this in the cards? ES: No. No. Well, we have no definite plans for doing that. Right now, we're really a media holding company and ultimately these services may be tied together -- for example LiveJournal and Championat have some tie-ins in Russia -- but that is not part of our primary strategy right now. CMSWire: Announced publicly was SUP's acquisition of LiveJournal. LiveJournal has had quite a successful history in Russia and SUP took over LiveJournal Cyrillic operations via a partnership with Six Apart in late 2006. Can you fill us in a little more on the background of the acquisition deal? ES: Yes, so we entered a licensing partnership with Six Apart in late 2006, and provided support and marketing for LiveJournal users in Russia and for the Cyrillic segment. So all the Russian speaking users worldwide. During the past year we worked closely with Six Apart and it seemed to be a very successful partnership.
We doubled the number of registered users from around 600,000 to 1.2 mil, and unlike most blogging platforms, most of these users were live (active). The monthly audience of viewers is now about 8.1 mil uniques (Oct 2007), which is about double from 2006 -- we don't have precise numbers from Six Apart from 2006. CMSWire: So throughout this past year, SUP has been heavily involved in support and marketing activities, but have they actually been running the IT infrastructure operations, or is that something that is just changing now? ES: We have run the infrastructure operations on the Russian side and we have been delivering a number of services to Russian users, but we were not involved in the infrastructure operations of the hundreds of servers that are running LiveJournal.
LiveJournal's Success in Russia
CMSWire: Switching topics a little, some people say that at least part of the reason for LiveJournal's success in Russia was precisely because it was not a Russian service -- and there people trusted the service with their data a bit more and trusted the service with their "voice" a bit more. Do you think there's any basis to this? ES: I think that this is not entirely true. The popularity of LiveJournal in Russia was due to several trend setters that started blogging on LiveJournal. These people developed a community around them. The fact that it was a foreign service, um, at the time, it was really the only service, literally the only service available.
There are two stories like this in Russia. LiveJournal is one, ICQ is another. The story with ICQ is very similar. Basically it was started in Russia by the same people. There are about six million registered ICQ users in Russia, which makes it one of the largest active ICQ communities.
So I would attribute the initial success to the conditions at the time -- having the initial group of trend setters on LiveJournal. CMSWire: So you say that the initial success had little do with LiveJournal's status as a foreign service. What about its continued and current success, did this play a role? ES: On some level the discussions in LiveJournal are more politically oriented than the discussions in other blogs in Russia. But this is due not because of the fact that its a foreign service, but because it is the intellectual elite who are blogging in LiveJournal. Therefore, the audience is more prone to discussing politics and more interested in the political situation.
I think the fact that the service was a foreign service -- and it continues to be a foreign service, since its a U.S.-based company, from the legal perspective, nothing has changed. All the contracts with the users, the user agreements, are still subject to California jurisdiction. And this is certainly the way we plan on having this in the future.
Why Six Apart Sold
CMSWire: Our readers may know that Six Apart acquired LiveJournal in January 2005 from its founder, Brad Fitzpatrick, and that it was a successful operation in the states as well. Why in your opinion was Six Apart willing to now sell LiveJournal to SUP? ES: Well, we certainly discussed this in detail with Six Apart. They needed to focus on their core products -- TypePad, Movable Type, and Vox. They are very good at developing and selling those products. LiveJournal, well, honestly it was a bit of a side project for them. And I think there was some frustration on the users' part. And I think it was a perfect time for them -- both financially and strategically -- to focus more on their other core businesses.
The Future of LiveJournal
CMSWire: Let's discuss the future of LiveJournal as part of SUP's portfolio. You've formed LiveJournal, Inc. and according to your FAQ on the acquisition a number of Six Apart employees will become part of that group. ES: Right,and from a corporate perspective it continues to be the same U.S. corporation as it was before. From a product perspective we've put together a 100-day plan, a FAQ and a commitment to the users. We're focusing on usability, general technical performance, search, and socialization.
Today, its very hard to find people in LiveJournal. There's a lot of functionality that LiveJournal simply does not have. There is a lot of functionality that isn't used and acts as a distraction. So, those are tactical things.
Strategically, LiveJournal's strength is it's communities -- bloggers, but also communities, the congregations of individuals. The individuals that gather based on certain common interests. They help each other solve problems and find information, or create unique projects and products. Creativity contests are an example.
LiveJournal is unique in this way. Creativity is a very important aspect of LiveJournal. LiveJournal, unlike other social networks, is about content. It has a unique place on the Internet, maybe like Wikipedia -- where through collaborative efforts, people create very interesting stuff. And so, we will focus on the communities and we will foster their creativity. CMSWire: So on a broad strategic level, SUP plans to focus on what you perceive to be LiveJournal's native strengths. And your mission is to remove the blockades and foster their development? ES: Yep. Definitely. And of course, we want to be the next big thing (laughs). We want to make LiveJournal larger than Facebook. We want to make LiveJournal the number one online destination. CMSWire: So with an agenda like that, it sounds like you might be competing head-to-head with services like Vox. Is that so? ES: Um, I think we will be competing with Vox. I think we will be competing with other blogging services. We'll also be competing with MySpace, Facebook, and the like. On one hand, its a dangerous world there, on the other hand, I think we have a very good start.
LiveJournal, Social Responsibility
CMSWire: Ok, so I'm going to switch gears a little and talk about the social side of this deal. There's been what some might call an "outcry" in the blogosphere about a Russian company purchasing LiveJournal. Some fear that the acquisition could result in less free communication in the Russian blogosphere. Do you understand where this is coming from? What is SUP's thought/response on this? ES: I don't unde