Why is Livejournal more expensive to run than Blogspot?

[karcy]

Hello all,

I was wondering if someone could answer this question I have. How much does it cost to run Livejournal -- or rather, why does it seem more costly to run than Blogspot?

I've been looking at some of the past entries and the community's memories, but I don't see anything closely related. I know that there are some people here who work or

Comments

[foxfirefey]

Blogger / Blogspot does not just have a partnership with Google. It is owned by Google. And Google makes its money off of ads.

So, when someone on Blogspot puts ads up on their blog? Google makes money from that, because it's Google ads they put up. (Maybe other ad services are allowed; I don't know.) Google makes an unknown percentage off of the revenue of those ads.

Google is also a huge company with tons of capital; it's easier for them to absorb the freeloaders. Blogger doesn't have to be profitable. Many of Google's services are not.

SUP does not have that luxury with LiveJournal if it expects to make good profits; LJ originally started a business out to sustain itself, and now it's been bought out by businesses backed by investors that want a real return. Sufficiently monetizing it for that purpose has been the challenge and comes with culture clashing effects.

[foxfirefey]

Also, paying the bloggers a portion of the ad revenue is an incentive to get them to put ads up and make Google money with them.

Additionally, Google withholds that money until an AdWords account makes a minimum $100. Many accounts take ages and ages to reach that amount, and Google can hold onto that capital until then--which has value in and of itself, especially spread over a lot of people.

[matgb]

What 'fey said.

I have a blogspot (or three), the one that I used to use a lot and get decent traffic to for awhile had a bunch of ads on, easy install scripting for adsense, all within the help menu. Took me 18 months to make enough to get a cheque.

Google has masses of server space all over the world, and they want people to put up websites with content to voluntarily plaster ads on that they've brokered. The cost of running Blogspot is minimal compared to the overall operation, it's just one more source of page impressions.

LJ is a separate, stand alone business, it needs to cover its cost in house, completely different model.

[donutgirl]

What about wordpress? Wordpress isn't owned by google. Is it just because wordpress is smaller that they don't need ads? Wordpress makes its money from Akismet, but presumably that's roughly comparable, proportionally, to what LJ made from paid users.

Not that I have any real idea, I'm just guessing. But I thought the OP raised an interesting question.

[corpuscula]

Andrew Polson said in some interview (in russian) that technical support of one account costs 10 cents per year.

[isiscolo]

I'd be willing to pay ten times that for mine! :-)

[mskala]

We have no real way of knowing how much it actually costs to run Livejournal or Blogspot. So asking "Why is Livejournal more expensive to run than Blogspot?" is inappropriate. It's like asking someone "Why do you hate America?" We don't know that Livejournal does cost more in the first place. All we "know" is that the people who run Livejournal whine about "oh, it's so expensive to run!" more than the people who run Blogspot do - and as others have pointed out, that may have a lot more to do with those parties having different business goals and different PR strategies for their respective services.

However, one reason that Livejournal could cost more than Blogspot is that there's a lot more technical complexity in Livejournal. Livejournal has to manage friends and communities and userpics and scrapbook items and private messages and so on. Any one user's account interacts a lot with other users' accounts, and not just in a read-only way. The database has to handle those connections smoothly. Blogspot's accounts are much more

[saralogan]

Why is LiveJournal more expensive to run than Blogger? = Why do you hate America?

That's rich. I'll have to pull that one out sometime.

"Why does my cat need expensive medication?"
"WHY DO YOU HATE AMERICA?"

[foxfirefey]

I think I'm confused? "Why do you hate America" is a funny satire question for any reasonable request (your usage), but it's also an example of a loaded question (mskala's usage) since it assumes that the person in question hates America, just like "why is LiveJournal more expensive to run than Blogger" assumes that LJ is more expensive to run than Blogger.

I guess I'm not sure how your usage syncs up with his?

[saralogan]

I was merely pointing out how ludicrous a comparison it was.

[stas]

It's not more expensive (not necessarily, at least). The difference is just in how the management approaches it. SUP managers want to "milk" LiveJournal for money, that's why they bought it. Since ads are the most conventional and easy way of monetizing, that's what they are doing - starting with banners, now getting ads to paying users with "sponsored accounts", and who knows what next - I trust they are smart guys, so they'll think of something.
For Google, Blogspot is more strategic investment, they have enough cash to pay for it. So, their approach to the matter is different.

[elfwreck]

I believe that's the key issue--that LJ is being run for maximum profit, not with the intent of covering expenses (including staff costs) and allowing growth.

LJ was making money before it was sold to 6Apart. Paid accounts more than covered the cost of free accounts (with invite codes). The problem isn't "how to make a blogging service not lose money," but "how to make back our investment capital in X months, and start making real profit." We don't know what X is. Nor how much investment capital is involved. But they don't matter--what matters is that LJ isn't being run to "make money," but to "make lots of money quickly."

[pure_doxyk]

Very good question! One thing I can add: Google *bought* Blogspot, and it was free before they did so, too.

[sukeban]

However, back before Google bought it, you were able to buy "pro" accounts at Blogger for 35$ a year (this was different than having an ad-free Blog*spot account. That meant a separate charge of $12/year and was independent from pro Blogger accounts). They discontinued this plan shortly after being bought.

http://www.news.com/2100-1032_3-5074041.html

Pro accounts used to have more features than plain, free ones:

http://web.archive.org/web/20021023010215/http://pro.blogger.com/
http://web.archive.org/web/20021013204721/pro.blogger.com/about/faq.pyra

(I saw a screenshot of the old-timey Blogger interface while looking for this info. That brought back lots of memories :D)