Moo Harder!

LiveJournal entertains me, and not only because so many of users throw fits of hysteria at the drop of a hat. For a very long time, it survived entirely on selling subscriptions to about 5% of its users, upgrading their accounts for extra avatars, picture upload space, and a few spiffy (if rarely-used) extra features. Every so often, it sells permanent upgrades, typically for $150.

This five percent is, by definition, LiveJournal’s most profitable five percent of users. Out of these five percent, permanent accounts are, I suspect, the best deal… for LiveJournal’s coffers. $150 buys five years of upgraded service, not counting the interest earned by not paying up-front. I suspect that a Permanent account actually stays profitable more or less forever - on a commercial scale, a gigabyte of bandwidth costs about fifteen cents, a gigabyte of storage about the same - but they get less so if they’re active for more than five years. For comparison, LiveJournal has only existed at all for nine years this March, and as a paid service for eight this September.

Unfortunately, once a user buys a permanent upgrade, that user immediately and forever-after becomes deadweight to the company, an expense that has no hope of bringing in future revenue. Let me repeat that - permanent account holders are not LiveJournal’s customers. LiveJournal has precious little incentive to care what they think. Customers write checks. Once LiveJournal cashes the user’s check, a permament account is a liability, pure and simple.

In 2006, though, they found a way around this problem, which recently became the default for new users: the ad-supported upgrade. I think this was a brilliant decision, in this twirling-moustache, corporate-Machiavelli kind of way. The advertising program means that permament and basic accounts, which ordinarily generate no revenue, are still financially valuable - LiveJournalers (LiveJournalists?) maintain extensive lists of interests and associations in their profiles. This giant database can be mined, and the interests and demographic information mined to target advertising to their friends.

I suspect that people willing to pay $20/year or more for LiveJournal are probably pretty good at keeping their profiles up-to-date, people willing to pay $150 up-front even more so. That’s good, and very important in this business model. Targetting is money in advertising-land.

I have a point in this long and rather unwieldy setup, a reason for this little Gedankenexercise.

Heck of a Way to Say “Hello”, Isn’t It?

A high-school buddy just recently sent me an interesting email. She’s doing a fundraiser for the Muscular Dystrophy Association, volunteering to be locked up “behind bars” until her friends raise some unspecified amount of money for the cause. Charity is an important part of a complete and responsible membership in society, and even though the MDA spends fifteen cents of every dollar on more fundraising and seven more on administrative overhead (compare to the Shriners Hospitals for Children, who spend nine cents on both put together), I do admire her dedication and willingness to help. My friends can usually count on me for donations to their causes.

That said…

Ash in Their Feather Dusters

I try to read two or three books a week, though I admit that life sometimes gets in the way and I can only read one. The past two months have been rough, though, and I haven’t had time to do as much pleasure-reading as I would like.

Now that my exam is over, though, I’ve been catching up on my pleasure-reading.

I came across this passage in David Neiwart’s In God’s Country. It’s a book about the patriot/militia movement, interesting mostly in the politics of marginalization and probably relevant to Senator Obama’s recent comments about guns, religion, and xenophobia.

The villagers, he said, knew about the camp, and watched daily as thousands of prisoners would arrive by rail car, herded like cattle into the camps. And they knew that none ever left, even though the camp never could have held the vast numbers of prisoners who were brought in. They also knew that the smokestack of the camp’s crematorium belched a near-steady stream of smoke and ash. Yet the villagers chose to remain ignorant about what went on inside the camp. No one inquired, because no one wanted to know.

“But every day,” he said, “these people, in their neat Germanic way, would get out their feather dusters and go outside. And, never thinking about what it meant, they would sweep off the layer of ash that would settle on their windowsills overnight. Then they would return to their neat, clean lives and pretend not to notice what was happening next door.

“When the camps were liberated and their contents were revealed, they all expressed surprise and horror at what had gone on inside,” he said. “But they all had ash in their feather dusters.”

We’ve all heard this story, of course, one way or the other, but this particular telling of it seems uniquely chilling. There’s something compellingly, disappointingly human about that final detail.

If you think education is expensive…

Lately I’ve been writing back and forth with a young friend of mine. She’s in her last stretch of high school, still not entirely sure of what she wants to do with her future or whether she can afford to go to college. A few days later, the Cal Alumni Association called me, and I signed up for a lifetime membership, partly in recognition of the opportunities that the school opened to me. As I balance these two events, I keep coming back to the same thought:

If you think education is expensive, try ignorance.
- Derek Bok, former president of Harvard University

Over a lifetime, the average college graduate makes a million dollars more than someone with only a high-school diploma.