EXCLUSIVE: Folks have been predicting a big year for mergers and acquisitions in 2005, and we are starting the year with a bang. I have learnt exclusively that Six Apart, the parent company behind hosted blogging service TypePad, and Moveable Type is about to acquire Live Journal, for an undisclosed amount. The deal is a mix of stock and cash, and could be announced sometime later this month, according to those close to the two companies. If the deal goes through, then Six Apart will become one of the largest weblog companies in the world, with nearly 6.5 million users. It also gives the company a very fighting chance against Google’s Blogger and Microsoft’s MSN Spaces.
Weblogs have become quite popular in last 12 months. A recent report by the Pew Internet, nearly 7% of the 120 million U.S. adults who use the internet say they have created a blog or web-based diary. That represents more than 8 million people. About 27% of internet users say they read blogs, a 58% jump from the 17% who told us they were blog readers in February. This means that by the end of 2004 32 million Americans were blog readers. Bacon’s Information, a media industry research group has recently started tracking blogs as a news source. Ben and Mena Trott of Six Apart, and Peter Rojas of Engadget were recently featured on the cover of Fortune magazine.
Live Journal was started by Brad Fitzpatrick back in 1999, long before Six Apart existed and blogging was all the rage. Live Journal, which is based in Portland, Oregon has 5.5 million users, though only a miniscule number are paying customers. Live Journal is very popular with teenagers and is built on an open source platform, and arguably is one of the largest open source projects on the web. Live Journal has been in talks with several other possible acquirers, though Six Apart is more of a natural fit. My sources tell me that all Live Journal employees are going to be retained.