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Blog Software Maker Moves On Competitor

Six Apart says it's buying Danga Interactive, operator of the LiveJournal blogging server, increasing its base to more than 6.5 million users.
Six Apart Ltd., which sells the popular Movable Type blogging software and hosts the TypePad blog service, said Thursday that it has acquired Danga Interactive Inc., operator of the LiveJournal blogging service, for an undisclosed sum of cash and stock. With the acquisition, the company says that its base now exceeds 6.5 million users.

According to a survey released earlier this week by the Pew Internet & American Life Project, 7% of the 120 million U.S. adults, or 8 million people, say they've created a blog or a Web diary. The survey also found that 27% of Internet users read blogs, a 58% increase from the 17% purporting to be blog readers in February 2004.

Six Apart sees the move as a way to reach a broader spectrum of bloggers. Barak Berkowitz, Six Apart's CEO, says that LiveJournal's users tend to be young individuals interested in communicating with family and friends. He characterizes Movable Type as a tool for power users, companies, and institutions.

Though perhaps not as significant as Google Inc.'s 2003 purchase of Pyra Labs and Pyra's blogging service, Blogger, Six Apart's acquisition further validates blogs as a significant channel for online publishing, business communications, and ad sales.

A recent report from Morgan Stanley, "An Update From The Digital World--October 2004," says blogs are important because "they sharply lower the barriers to entry for producing a professional-looking and frequently updated Web site."

The financial-services firm's report predicts that user-generated content and the monetization of that content will play an important role in Internet growth in the coming year. Interestingly, it sees Yahoo Inc. as the greatest beneficiary of this trend. It argues that while Google's search engine and advertising tools set the pace for new ways of searching for information, Yahoo may prove the pacesetter for new ways of serving information. Citing the ease with which users can populate Yahoo personal pages with RSS feeds from blogs, the report contends that Yahoo's ability to aggregate blog content will result in more possibilities for advertising revenue.