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Russia: The Future of LiveJournal's Network Effect

On October 12, 2011, the Vedomosti newspaper published an article titled “A Half-Dead Journal” [ru] which analyzed the drop in LiveJournal's traffic within the last nine months. The publication provoked a heated discussion on the credibility of journalists’ work, the value of network effect, and the structure of the Russian blogosphere.

Defense of LiveJournal

Svetlana Ivannikova, head of LiveJournal Russia, Demian Kudryavtsev, the managing director of Kommersant Publishing House (one of three main shareholders of the SUP Fabrik, a company that operates LiveJournal) and blogger Anton Nossik (who worked as a ‘social media evangelist’ at SUP Fabrik in 2006-2008) claimed that Vedomosti did a bad journalistic job and misinterpreted the data.

Ivannikova presented graphs that compared the traffic structure of LiveJournal in 2009 and 2010, which showed that the drop in traffic might indeed be connected with seasonal prevalence.

Why LiveJournal is important

The debates on whether or not LiveJournal was losing its audience have been taking place since mid-2010, as more and more alternative social networks entered the Russian market. For a long time, LiveJournal has been a platform of choice for many bloggers. It was so popular among netizens that it got into the spotlight of the Russian big business.

In 2007, it was bought [ru] by the Russian businessman Alexander Mamut and minor shareholders (later Mamut sold a significant share to another ‘oligarch’ Alisher Usmanov and Usmanov-controlled Kommersant Publishing House). In August 2011, Usmanov and Mamut announced that they would sell SUP (some commenters argued that the Vedomosti article was published on purpose by a potential buyer in order to reduce the price).

The preference of LiveJournal over stand-alone blogs or blogs that didn't have friend connections as one of their core functions has been an important distinguishing feature as compared to other countries’ blogospheres. In 2011, however, the platform experienced DDoS attacks, which pushed some users to establish their presence on alternative social networking platforms, such as Google+ and Facebook.

Among other things, the Vedomosti article noted that LiveJournal's financial structure was non-transparent (as a privately-held company, SUP doesn't have an obligation to share its traffic data or financial statements) and that one of the revenue streams was covert blog ad placements, the market whose size even ad analysts cannot evaluate.

Users confused

The observers of the scandal (it also has another aspect: Kommersant and Vedomosti are two main competitors in the niche of business analysis), however, expressed confusion rather than loyalty to their once preferred platform.

Sergey Muhammedov, a popular photoblogger, wrote [ru]:

ХЗ, не верю я в эту статистику, но по ощущениям так и есть. Офигительного всплеска в сентябре после лета я не почувствовал.

[Who knows], I don't believe in this statistics, but that's how it feels. I didn't feel an overwhelming increase in September after the summer.

Yuri Sinodov, an IT-journalist at Roem.ru, complained [ru] that the problem of LiveJournal was its non-transparent policy in disclosing data. He argued that representatives of LiveJournal could open the data to make bloggers think for themselves, if the Vedomosti article was non-professional, as they claimed. He, however, presented three independent indicators that supported the main thesis of the article: the platform's audience is declining even as the Internet audience in Russia is growing.

The value of the network effect

Sinodov's commenters also discussed the core of the ‘LiveJournal’ case – and the network effect that has been accumulated within almost a decade.

Anonymous commenter Alter Ego asked [ru] why no one was creating an analogue of LiveJournal and whether it was not the platform that was dying but the format:

[…] преданных многопишущих юзеров, составляющих активную аудиторию, сервис в общем устраивает, им главное писать и писать куда-то, потому серьезно развивать сервис или делать более технологичный аналог нет смысла, […], а волна новых людей в такой формат не придет, как его ни развивай и ни оформляй?

[…] The service satisfies loyal users who write a lot and who constitute the core audience. They just need to write and to publish it somewhere. This is why there's no sense developing this service or creating a more developed analogue, and the wave of the newcomers will not get such a format, regardless of whether you will develop it or not.

User Ilyin wrote [ru] that even if the accounts and files would migrate to any other platform, the real issue would be with migrating the ‘connectivity’ of users:

Путь на новые суперские платформы – это перефасовка с нарушением связности. […] Все связи – сразу оказываются под угрозой. Особенно не зафиксированные в логах, а зафиксированные в человеческих привычках. Мол: “патриотов я могу посмотреть в комментах к постам Тёмы”, “провинциальные сумасшедшие носят красный юзерпик с номером”.

Moving to other […] platforms involves re-configuration with breaking up of connectivity. […] All connections [between bloggers] are threatened. Especially those that are not fixed in the logs, but fixed in human habits. E.g.: “I can find patriots in the comments to Tema's posts [Tema is a popular blogger], “provincial madmen have red userpics with a number.”

***

Many platforms are much bigger than cities, even bigger than certain countries. Unlike cities, however, they're much more vulnerable to the executive decisions, some of which may lead either to growth or decline. The speed of migration of users, of course, mitigates this vulnerability. Nevertheless, the more content, habits, and relations are created by users, the more real these virtual spaces look.

The case of LiveJournal with its transfer from one investor to another, its non-transparent data, a growing number of both computer and human bots and paid advertisement, resembles the fate of MySpace, a platform that was once worth a billion dollars, but was eventually sold for $50 million and was left with a very specific niche of users.

Unlike LiveJournal, MySpace had never been an arena for political discussions and free speech in authoritarian countries. This puts the process now perceived as a decline in a new perspective and leads to the ongoing questions: 1. How long will it take Russian bloggers to re-build their connectivity if LiveJournal continues to decline? 2. If they don't, shall we witness the first successful massive disruption of political digital networks? 2. If they do, what configuration will the bloggers choose: would it be a unique platform (like LiveJournal of the past 10 years), or a preferred social network, or a hybrid of several social networks?

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