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App.net turns to open source as payments stall

App.net

By Nicole Kobie

Posted on 7 May 2014 at 11:14

Paid-for micro-blogging platform App.net is shifting to open source after subscriptions raised less revenue than expected.

App.net is similar to Twitter: it lets users post short messages of 256 characters, but it's also a development platform for social apps.

The site doesn't offer advertising to pull in revenue. While there's now a free tier - with limits to the number of people you can follow and 500MB of storage - full membership costs $36 a year, including 10GB of file storage, or $100 annually for a developer account.

The company said it had seen its first major round of subscription renewals a few weeks ago, and reported good news and bad news.

The renewal rate is enough to make App.net "profitable and self-sustaining", with hosting and other operational costs covered. However, there's not enough money coming in to pay for full-time employees.

To save cash, the two founders, Dalton Caldwell and Bryan Berg, will instead work on a contract basis, as will other employees, and the Developer Incentive Program has been shut down. In order to keep development ticking along, App.net will shift a larger slice of its codebase to open source, starting with its microblogging web app Alpha.

"The continued support and interest of the App.net community is vital to the continued health and well being of the platform," the co-founders said in a blog post. "Depending on the revenue that App.net makes, we are open to increasing or decreasing the budget we can allocate towards additional development."

Either way, the co-founders said they'll work to keep the service up and running "as long as there are customers willing to support it".

"We continue to believe in the usefulness of a sustainable social platform where users and developers are customers, and not the product being sold to advertisers," they said.

"If this were a company without a clear business model, App.net would have disappeared long ago. The market conditions that were the driving force behind App.net’s creation have not changed. If anything, there is more of a role for a social platform like it."

The news follows a report from Trend Micro that suggested Britons were willing to pay for private and secure web services - but most didn't want to shell out more than £10 annually.

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