The hot rumor is of mergers in the Blog hosting marketplace – Six Apart (Typepad and MovableType) and LiveJournal.
Market power, the ability to make your own weather in an industry, comes primarily from market share. Market share is power-law distributed. The severity of the distribution varies depending on the ecology of the market. Two processes that drive toward increasing severity. are worth remembering. The first is the positive feed back that depends on rapid growth – i.e. lots of new customers who base their purchase decision on lousy information; i.e. they just pick the market leader. The second driver is consolidation.
The most powerful force that undermines the consolidation is how low the barrier to entry is for new offerings.
So. What would a merger like this mean for blogger industry market share?
For market share you’d like to know how much traffic each blog hosting company gets. Alexa has that data, but I can only get traffic rankings – Amazon, Blogger, Live Journal and Typepad their ranks are 17, 314, 565, 765 respectively. Rank isn’t traffic. Traffic rank is distributed as a power-law. I have no idea what the slope of that is so if I guess that it’s one then the relative traffic of those four sites would be 50, 3.2, 1.7, 1.3. Very rough but the merged company would still be smaller that blogger.
Here’s an attempt to answer the same question from based on “google hits”; I’m amazed that she get’s a similar result to mine – given how hoky my approach is.
None of this means anything at all if Blogs aren’t an industry; but rather are just a feature. That’s certainly the attitude of most of the portals – AOL, MSN, Yahoo, and all the asian portals etc. I have no idea how much traffic they account for.
Somebody who pays for access to the Alexa data could provide a more accurate model. As could one of the blog indexing companies.
It certainly doesn’t appear that a merger like this one would give the resulting company the power to set standards.
I find more interesting what it implies about the maturation of the blogging industry. If your a fast growing company mergers are can cripple you; but if the era of fast growth is coming to an end then the next means to gaining market share and the power that comes with it is becomes mergers.