DON'T PANIC

[ayoub]

First, let's look at the official press release.

Let's look at the numbers:

16 million accounts.

Let's say that 10% are paid.

1,600,000 * $35 = $56,000,000

Yes, really.

Let's say, conservatively, that six million are plus accounts, and generate $5 of revenue per year.

6,000,000 * $5 = $30,000,000

Projected annual revenue, then, even at half of the numbers I've mentioned, is in the $40 million range.

And that doesn't even begin to get into things like the agreement with The Independent in the UK, or the sponsored accounts in Russia.

Let's look at recent history:

Server moves that are completed in as short a time as the recent move of Livejournal is not done by picking up servers and physically moving them, especially considering the distances involved. If SUP were smart, they would have gone for a highly managed solution that reduces the need for sysadmin staff. Yes, it's called outsourcing, and yes, it works out cheaper.

The Permanent account sale was extended for maximum effect, especially considering the time of year, and economic climate. I would assume that a few thousand at least were sold. ten thousand permanent accounts = $1,500,000.

Let's look at business practices:

No company will keep paying staff they no longer require. No company will make payments in this financial climate that they are not contractually bound to make. No company that can afford cheaper staff in another country will pay through the nose for foreign workers. My condolences to those who lost their jobs, but this is capitalism.

Finally, a synopsis:

Valleywag, according to the comments in the blog entry that sparked all of this, is not a fan of Livejournal. The numbers quoted have been fabricated. More believable numbers are:

The true numbers ... are more like 13 let go, 17 kept in total, and 12 let go and 12 kept in SF. Always be skeptical of Valleywag.

Of course, if this storm in a teacup prompts people to leave Livejournal based on a perceived threat, then yes, our beloved LJ may be lost, but it won't be SUP's fault. It'll be the userbase's own fault.

So, don't panic, and don't let one tiny, obscure article get in the way of common sense.

Comments

[razzberee.livejournal.com]

Can I link to your post in my journal to share this info hon?

[ayoub.livejournal.com]

Yup, it's a public post :D

[thebabynancy.livejournal.com]

Not worried. Common sense to back it up regularly, anyhow. :)

[ayoub.livejournal.com]

Indeed it is :D

[bangdrum.livejournal.com]

I'm very tired and currently panicking from other things, and also have no idea what is going on.

So, um, what IS going on and why should/shouldn't it bother me?

Thanks,

Miserably Shaking

[ayoub.livejournal.com]

Livejournal let go of some staff in an effort to streamline the operation, and people are saying it's the end of LJ...

[padiwack.livejournal.com]

Not only are you a delicious Brit, you are a SMART delicious Brit!

I'm gonna post this in my journal as well, try to settle some nerves!

Thanks!

[ayoub.livejournal.com]

:D

Awwwww, you're making me blush!

Thank you :D

[sirenity.livejournal.com]

Oh quit with the blah blah, it's waaaaay more fun to do this -----> THE SKY IS FALLING! THE SKY IS FALLING!

heh

[the-ravyn.livejournal.com]

Yeah, but it would suck if one doing that was running around the room and flailing their arms at the same time.  One strategically placed coffee table could get one saddled with a cast for at least 6 weeks. ;)

[stainsteelrat.livejournal.com]

We're doomed I tell you.... doooomed!

[ayoub.livejournal.com]

LMAO!

[sharpchick.livejournal.com]

I'm willing to go with your numbers.

I'm not pleased, however, with the fact that the folks remaining at LJ have issued a news release, but said zilch, nil, nada, nothing to the userbase.

The silence from the remainig powers-that-be at LJ is just deafening.

And that alone is enough to make me start considering alternatives.

[ayoub.livejournal.com]

To be frank, how does a corporate streamlining affect the userbase?

I mean, as long as they maintain their SLA's as regards customer support (of which there aren't many, because support is largely volunteer led), then the users don't really need to know about how its staffed.

Of course, I'm a jaded corporate IT boss type, though... It's all numbers to me :)

[xavierism.typepad.com (from livejournal.com)]

Where will all the depressing people write their depressing stories if LJ fails? Ha I agree...sounds like another rumor in the LJ loop.

*CHEERS*

[sirenity.livejournal.com]

You KNOW you love my depressing stories, mister! Plus, you also know I'd haunt you no matter WHAT.

=)

[nonickname96.livejournal.com]

Thanks for the info. I hadn't researched it yet myself, so thanks for saving me the trouble! *loves on you*

Do you mind if i link to this in my own journal? Panic is probably going to ensue and i think this post helps to quell some of that!

*hugs*

♥

[ayoub.livejournal.com]

You can link it, by all means :D

And hey, I'm glad you found the post useful :D

♥

[the-ravyn.livejournal.com]

YAY!!!!  Thank you, Voice of Reason. :D

[ayoub.livejournal.com]

:D

Yes... Albeit slightly annoyed :P

[wigancasino.livejournal.com]

hehe, I didn't panic. I just...didn't really care. Plus I have a hangover, and so nothing seems important right now heh. xx

[ayoub.livejournal.com]

LOL!

But ow... I hope the hangover fades!

[babeofbryan.livejournal.com]

Im here by way of padiwack Hope you dont mind me linking your post to my journal. My friends list is going nuts!

[ayoub.livejournal.com]

:D

You can link, it's fine with me :D

[seegwa.livejournal.com]

So... what you're saying is: Don't Panic? ;)

It would be good for me to figure out how to back things up anyway. There's a lot of personal history on my LJ that I don't wanna lose. But other than that, I ain't going nowhere.

Thanks for the logicing, there, smart 'n' sexy!

[ayoub.livejournal.com]

Backing up is always a good practice...

:D

The dope as I have been told

[gsharper13.livejournal.com]

http://ebenbrooks.livejournal.com/

Re: The dope as I have been told

[ayoub.livejournal.com]

That makes sense :D

[sinemoria.livejournal.com]

I was directed here by the fantabulous padiwack...Thank you for taking the initiative and researching and etc. :)

[ayoub.livejournal.com]

You're very welcome :D

[bia22.livejournal.com]

Thanks for the synopsis, I rarely do the math, but its nice to surround myself with people who do.:)

[ayoub.livejournal.com]

:D

Maths is always fun :D

[dolorinterno.livejournal.com]

uh, I had no idea. Good thing you're on my flist :)

[ayoub.livejournal.com]

:D

*love*

Padiwack sent me, too.

[ar-wahan.livejournal.com]

I have some overlap with her flist, but most of mine is in a different circle. With your permission (which I've seen you've granted others), I'd like to link to here, too, but will wait until I get the official OK.

The other thing is ... when people are laid off, they do not typically get severance pay in this country. In the U.S. "laid off" technically (although not always likely in "real life") does not mean "severed" -- it means one could be called back to work later on when things improve. The employees can file for unemployment compensation, and hope they get paid for the vacation time they've earned but haven't been able to use. But the lack of severance pay for the LJ folks laid off is an indicator of nothing, as you noted.

Re: Padiwack sent me, too.

[ayoub.livejournal.com]

Go for it :D

And thanks for filling in that detail... I'm only slightly knowledgeable on UK employment law :)

[angellamongus.livejournal.com]

I've been reading the link and seeing it pop up all over lj today. like I said, I don't think LJ would actually close, nor am I running to another blogging site at this point in time (unless an official statement is released Of course) but I did back up my lj .. which is kinda a good thing anyways cause this IS the net and there can one day come a "bug" that destoys stuff or something.

But I'm a total lj'er. I don't like other blogging sites so no way am I running elsewhere!

[ayoub.livejournal.com]

LJ is most suited to me... :D

[magsmom.livejournal.com]

You are a wise calming voice. I believe you are probably correct on all counts - and I certainly hope so. I didn't intend to fan the flames, but I actually already post elsewhere too, and in a worst case scenario, would love to reconnect with people.

[ayoub.livejournal.com]

:D

Thank you!

I post some stuff at one of my own sites, but nothing that doesn't go here first...

[bluesgirly.livejournal.com]

Oh I knew you'd know what to do with this JESUS!

I love LJ. I'd just kill myself if I had to slug it out on Facebook bleh.

[ayoub.livejournal.com]

Facebook is too much on the social network side of things... I prefer LJ :D

Came here through a friend's link

[theferret.livejournal.com]

Brilliant. Thank you for putting what I was feeling into words.

Also remember how about every 6 months, there's always some sort of panic here.

I hope you don't mind my linking to here.

Re: Came here through a friend's link

[ayoub.livejournal.com]

I don't mind at all :D

What bugs me about the panic this time is that if people stop paying LJ because of rumours, then we will have a crisis!

And I don't mind at all :)

[tahirire.livejournal.com]

Thanks for posting this, I see you have said it is ok to rec this post, and so I shall. :-)

[ayoub.livejournal.com]

Thank you for reading, and yes, feel free to link :D

[sparrow2000.livejournal.com]

Thank you for such a sensible, measured analysis of the current kerfuffle. The phrase self fulfilling prophecy comes to mind as it does every 3-6 months on LJ *g*

I tried to back up my journal tonight and couldn't because there were too many people trying to do the same thing. I've been meaning to do it for ages but lethargy got the better of me, but this has prompted me to be more diligent in my housekeeping - well at least in theory!

[ayoub.livejournal.com]

:D

Indeed!

I tend to back up weekly, but it's driven by the fact that LJArchive makes it easier to search my LJ for posts that I remember writing :)

[eithnepdb.livejournal.com]

You're assuming of course that all the money brought in my LJ stays in LJ.

SUP has other holdings so I don't think it's that cut and dried.

Of the 10% you mention being paid accounts that may very well not be annual revenue if a certain percentage of those accounts are permanent accounts. There's no cash flow there.

And of course no business keeps it's cash sitting in a bank somewhere - it gets invested - and investments took a dive recently so they may have very well lost a good deal of their working capital.

I'm not sure I buy the doomsday scenario but lots of more stable businesses have gone under these past few months so I guess I wouldn't be completely surprised if LJ did go under.

[ayoub.livejournal.com]

Indeed, I am making a fair few assumptions, and I'm fairly certain that this streamlining has at least some of its reasons in cashflow, but I doubt that SUP has many bigger concerns than Livejournal.

And I also doubt they would have paid what they did without a fairly steady revenue stream coming in from this place.

And, ultimately, these are the times we live in, so yes, most businesses out there are at risk...