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February 15, 2005

Weblog Tools Market - Update February 2005

By Elise Bauer
February 15, 2005

Updated February 18, 2005. Scroll to end to see update.

This article is a continuation of the analysis presented six months ago in An Overview of the Weblog Tools Market.

Last August in An Overview of the Weblog Tools Market the concept of a Weblog Tools Use Index was introduced - the degree to which Google spidered pages associated with certain weblog tools, with the proposal that this number could be used as a proxy for the extent to which the tools are being used, and therefore give some indication of "share" of use. To reduce the confusion that that terminology caused, in this article the sum of the number of websites linking to a weblog tool URL and the number of websites containing the URL will simply be the factor used to determine comparative percentages, or "Google Share".

I believe that Google Share is a fair proxy of the extent to which these tools are actually used, with some caveats. Blogs that are used in a corporate setting often sit behind corporate firewalls, or may have any reference to the blog tool stripped out. This would affect the numbers for tools such as Movable Type, Wordpress, and other stand-alone (non-hosted) blog applications. Among hosted services, Typepad offers password-protected, non-indexed blogs which account for 30% of the total Typepad use, according to Typepad maker Six Apart. Typepad would therefore be underrepresented in Google by this amount.

Market share analysis is an educated guessing game, especially when you are trying to determine share with only publicly available data. Private companies rarely release usage stats to the public. The public companies that own blog tools - Microsoft and Google - are not required to publicly report data for products that represent such a tiny fraction of their overall revenue. And even though the hosted services know how many active accounts they have, many of the software makers do not. Those offering shareware or GPL tools can only count the number of downloads, not the number of people who use their free software, or the number of blog entries created with their tools. Google can give us some indication of the degree of use or influence of these tools in the public World Wide Web.

Please note that the analysis presented here is limited to tools and services used in the United States. Clearly, a broader market analysis would be preferred, one that included local services in Europe and Asia. But, as this author is lacking the language skills which would be necessary to conduct such analysis, this report, like the one that preceded it, is focused on the US.

What has happened in the last six months?

One piece of public data we have is from Technorati, a service that tracks weblogs. In August 2004, Technorati had tracked a little over 3 million weblogs. At the time of this analysis, early February, 2005, Technorati had tracked 6.9 million weblogs, an increase of approximately 120% in six months.

When we look at the number of Link to's and Contain URLs of the various tools, they have also grown - by an average of 175% in the last six months, with the bulk of the growth coming from the largest hosted services - Blogger, LiveJournal, and Typepad. Remember that Google tracks pages not sites, so while the number of blogs may have grown by 120% according to Technorati, the number of pages being produced by these blogs appears to be growing at an even faster rate.

Click on graph to see a larger view

Compare with August data

Note that there are a few weblog tools in this data set that were missing from the August data - Rollerweblogger, Nucleuscms, b2evolution, and MSN Spaces. The first three were brought to my attention by commenters on the first article, and at the time I noted their Google data, also in the comments. MSN Spaces however, is a new free blogging service by Microsoft. It was launched in December 2004 and has already made significant headway in Google Share - 3% in only 3 months.

In January, 2005, Six Apart, the company that produces both Typepad and Movable Type, acquired LiveJournal, the second largest blogging service, giving that company a combined Google share of more than 40%, making it the number one provider of weblog tools and services.

Lead or Be Left Behind

One useful tool for analyzing market share is to plot the various players on a "Growth Share Matrix". (Bruce Henderson, founder of the Boston Consulting Group, popularized this tool as a way for companies to evaluate their portfolios of business units.) In the following graph, Google Share is plotted on the Y-axis and 6 month growth rate on the X-axis. The size of the circles roughly corresponds to the number of Link to's and Contain URLs for each tool. From the graph we can see that not only does Blogger have the highest amount of Google Share, it is also growing much faster than the average of all of the tools, and twice as fast as the Technorati Index. Typepad is growing almost as fast as Blogger. Typepad's inner yellow circle represents the known Link to's and Contain URLs, while the light outer circle represents what may be hidden from view due to the fact that 30% of the Typepad blogs are private. Note that MSN Spaces is not on this graph, as there was no data for it 6 months ago. If it were on the graph, it would be at the 3% share level, and as far to the right side of the matrix as possible.

Click on graph to see a larger view

In any market that is growing at an astounding 300% a year, if your user-base is only growing by 50%, you are falling behind, quickly. The winners will be those companies that are able to sustain a higher-than-average growth rate over time, carving out enough market share to build a profitable business.

Typepad continues to be an anomaly. Trailing only Blogger in both share and growth, Typepad - a fee-based service - is gaining share in a field of free services.

Market Dynamics and Segmentation

The market for blog tools and services is still pretty young. In 2004 we observed the beginnings of what Geoffrey Moore would call "crossing the chasm", a critical leap from technology being used by early adopters to broader market acceptance. While for several years blogging was the purview of a relatively small group of enthusiasts, it is now coming full force into the mainstream. In this stage customer and product segments begin to get more clearly defined. We've already distinguished between the free and fee versions of services and stand-alone applications. As we move forward, distinguishing the different dynamics in the consumer, small business, and the corporate markets will become more important, as customers in these segments are using blog tools for different reasons and have different needs.

Stand-alone blogging applications (non-hosted) are underrepresented in our analysis so far, for reasons already given. However, even if they had twice the usage as is being picked up by Google, they would not be the key drivers of blogging growth that is evidenced by the hosted services in the consumer market. These applications require that the user have access to a web server, and that they can configure and load perl or php scripts onto that server. I'm often amused by the petty bickering that goes on in the blogging community over which tool is better - Movable Type, Wordpress, Expression Engine, etc. Who cares? In the consumer market, less than 1 percent of those wanting to blog have the skill level or desire to deal with HTML tags, let alone configuring scripts for a server. These tools will never win in the consumer space; they are just too difficult to use.

They may find a home in corporate deployments however, as these customers have the means and the need to host their own weblogs, rather than use a third party service. The tools that will win in this space may not actually be the best tools per se, but have the most organized sales force, the best documentation, and the best support offerings. Even so, many companies will still choose a hosted service such as Typepad over doing it themselves, simply because it is easier and more cost effective.

Thoughts and Predictions

What is a blog, anyway? It's just a website. A website that is extremely easy to update with fresh content. A website that has built in capabilities - the ability to comment for example - for interacting with its readers. A website that has a personal voice. From a product perspective, it's a set of features, features that any company making tools for website building should incorporate if they want to stay in the game. Companies that are in the business of hosting personal websites for people will have to start offering blog capabilities, whether it's their own home-grown variety or achieved through a partnership with one of the existing players.

Look to see MSN Spaces take off in the next 6 months. Microsoft is the 800 lb. gorilla sitting in the corner of most software markets, blogging no exception. They have just as much market power as Google does in this space and the market is still young enough for a big player like Microsoft to quickly take a big chunk of the growth.

On the consumer side, owning the place where millions of people are spending time writing and reading is a good thing. There are many ways to monetize places of such concentrated attention. Look for the major companies to aggressively pursue both the explosive growth of the US market as well as international markets.

From a service perspective, blog tools are more than just a collection of specialized website building features. Blogs by their nature are very personal. They hold the most cherished thoughts, dreams, and knowledge of those creating them. An established blog represents hundreds, if not thousands of hours of someone's time - time to think, write, and create. Blog tool companies must begin to see their mission as caring for this, the most precious asset their customers have, and act in accordance with this mission. Customers will demand nothing less from them.

Update February 18, 2005

How to Best Interpret this Data

The data presented here is far from precise. However, with all its glaring faults, it may be the best macro-level public data we've got, until Technorati releases some of their numbers. That said, one shouldn't read too much into specific share points. I would read the data as "directional" as one observer put it. The thing to noodle isn't whether Movable Type's share is 10% or 2%, or whether Typepad is as big as Blogger (highly doubtful), but the growth rates. Technorati has been showing a doubling of the blogs it tracks every 5 months or so, or 120% every 6 months. The data here shows a 6 month growth rate of the blog pages captured by Google of around 175%. This should tell anyone who is in the blog tools business that if their product or service isn't keeping up with this growth rate in terms of sales or downloads, it is falling behind.

The other thing to notice is that when you use a specific blog tool, you might find that many of the people you know who blog also use that tool, and may assume that the overall market maps to your perspective of it. This is a distorted view of the market. I started using Movable Type because a friend of mine used Movable Type. Through the Movable Type community, I met more people who used Movable Type, and my universe of bloggers is heavily weighted toward Movable Type because of this. From my food blogging community however, I've noticed that the food blogs are dominated by Blogger and then Typepad blogs. One could say that the food blogging community is more aligned with a typical consumer than the Linux community, for example. When I first did this analysis 6 months ago, I was stunned to see how big Blogger appeared to be, compared to the number of Blogger blogs I read. A useful aspect of this kind of research is that it forces us to look beyond our own little (comparatively) worlds. This analysis generates many more data points - 14 million of them, this iteration - compared to our own personal data set.

The data for the services - Blogger, LiveJournal, Typepad, Xanga, Blogdrive, AOL Journals, MSN Spaces, etc. - is cleaner than the data for the GPL and standalone apps. Why? Because all pages on these services "contain the URL" for the service, the key driving metric for these services. There are some that are password protected, and we can make some assumptions about those. We can also just state that the numbers reflect the publicly available web pages and leave it at that. The GPL and standalone apps are a different story. There is Blogware (that I neglected to include this round - thanks to Eric Rice for the heads up) who wholesales to other companies with their own brands. Hard to track. Movable Type is getting a lot of pick-up in corporations, either behind the firewall or without links to movabletype.org. Impossible to track (unless Six Apart releases their sales data which they shouldn't and probably won't.) The other standalone tools rely on their users putting a link-back to them, which would get picked up by Google, but there is no requirement to do so. The data is messy for these tools.

A Google share analysis is only one way to paint a market picture. It itself is one data point. I, like many others, will be more than curious when some of the companies that programatically track this space (like Technorati) release their numbers. Then we'll have some more data points for comparison.

Posted by elise on February 15, 2005 to Blogging | Printer-friendly version

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