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Software licensing can be a tough business. But if you're able to build a great product and acquire customers, it can be a rewarding business. The founders of Jelsoft, the company behind the popular vBulletin message board software, know that first hand.

Having built arguably the best message board software out there, they sold Jelsoft to Internet Brands in 2007 for an undisclosed amount. And two years later, Internet Brands is facing a violent customer revolt over a new product and new licensing terms.

The revolt centers on vBulletin 4.0, which comes in two flavors: a publishing suite and the standard forum software. Licenses for both are significantly more expensive than previous versions of vBulletin, which were sold in both owned and leased form. Internet Brands has also changed its upgrade and licensing terms in such a way that many users believe they're being 'forced' to upgrade. Those who have owned licenses can't purchase annual renewals for $40 to $60 to get access to support and security upgrades; they need to spring for a 4.0 license, which will cost more.

Personally, I can see why users are miffed. In my opinion, Internet Brands should have seen a bad response coming given how they've shaken up the pricing and licensing terms. But that isn't the story. Internet Brands, like any company, is free to do what it thinks is best. The story is instead how Internet Brands has responded to the response it's received from some customers. As reported by The Register:

Complaints have flooded the vBulletin's own support forums - not to mention third-party forums and blogs - and over the weekend, the company rescinded the support forum credentials for at least a handful of these users.

That's right. There are numerous reports that Internet Brands has banned some its own paying customers from its forum and in the process, has denied them access to areas of the forum they paid for.

Not surprisingly, complaints about the pricing and licensing changes have popped up in a lot of places. This is because customers have been forced to third-party forums and blogs in part to escape the censorship that is reportedly being applied to negative messages on the official vBulletin forum. Censorship which seems to be confirmed by a "Forum Moderation Announcement" posted by Customer Support Manager Steve Machol as the backlash began. It states in part:

As vBulletin has grown over the years we have often allowed posts on our forums which frankly are not constructive and which other companies would not allow on their sites. We have done this in the belief that most people can be reasonable and conduct themselves maturely and constructively. We still believe that most people act this way.

However it is clear that this policy has only opened the door for types of conduct and comments that are simply over the top and not acceptable. This is going to change as of now.

Please be aware that we will no longer allow posts with non-constructive rants, inflammatory language and trolling on our forums. We are aware that some people are used to being allowed to get away with such things. But beginning now that will no longer be the case. Such posts represent a distorted picture to current and potential customers and while we would like to be able to trust people to act maturely, events have proven that is simply not possible. We will, of course, continue to respond to real questions.

The timing of this post is clearly not coincidental, and the motivation is pretty much stated: Internet Brands doesn't want disgruntled customers badmouthing the company or its products in front of new potential customers. So it's clamping down on anything "non-constructive", which could conceivably cover just about anything negative.

That's obviously a losing strategy on today's internet. Customers just go elsewhere, ironically using the same sorts of tools Internet Brands sells. Case in point: someone has set up a dedicated blog and forum called vBTruth, which bears the subtitle "Shining Light on Internet Brand's Disaster".

Now Internet Brands isn't the first company to struggle with a customer revolt online. But it offers an especially ironic case study because Internet Brands is itself an operator (and prolific buyer) of large community websites. In other words, it should know the power of community and social media because part of its business is based on community and social. Yet according to The Register, Jelsoft/Internet Brands General Manager Ray Morgan wouldn't even follow through with a comment on the situation.

I think there are two key takeaways from this:

  • Make good decisions. Most people could have seen this coming: a dramatic change in pricing and licensing terms is more likely to cause anger than joy. In my opinion, Internet Brands could have avoided this fiasco by considering whether it was worth trying to fix something that arguably wasn't broken.
  • When you don't make good decisions, deal professionally with the fallout. Whether you apologize or stick to your guns, how you react to a bad decision can have an even greater impact than the decision itself. Here, Internet Brands has added fuel to the fire by trying to shoot down criticism of its product and policies. And, if the reports are true, it has made an even bigger mistake by cutting off paying customers.

Every company makes mistakes and on the internet, chances are your customers won't hesitate to let you know when you make one. There are a lot of ways to deal with unhappy customers and if you're looking to preserve your internet brand, giving your customers even more to be unhappy about probably isn't the best way to go about it.

Photo credit: Nima Badiey via Flickr.

Patricio Robles

Published 30 October, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2379 more posts from this author

Comments (15)

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Azh

Jumping on the negativity bandwagon I see :) You might want to do some further research into what has gone on. It appears just like The Register, you are also taking the biased one-sided slant. I'm a very happy customer with vBulletin/IB/Jelsoft. The people who got banned from the forums (not from receiving support for the software) did so due to being disruptive and unruly, and most of the bans have since been rescinded. Get ALL the facts from all parties before rushing to print with news that "hot" - it generally only makes you look silly in the long run when you find out you were wrong.

over 6 years ago

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Steve

Excellent post. Thanks for sharing.

over 6 years ago

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Missing theWorst

This article doesn't even explain the worst of the revolution against vBulletin and Internet Brands. The massive price increase that requires existing customers to pay over 80% of the purchase price of their software to upgrade.The price for someone to get the latest version of the software is practically the same as someone buying the software new. This reducing customer licenses to almost a worthless value is only part of the story.

The second part is that customers were never given any prior notice about this insanely expensive new licensing structure and could have saved themselves a significant amount of money had Internet Brands done so. Customers who just recently purchased version 3 of the software are being forced to purchase an upgrade to version 4!!! Imagine your surprise when you spend $180 to buy a product on monday and on Thursday your told you have to spend another $130 NOW or you will be forced to spend another $250 to keep your software current through the new version being released? Yes... as crazy as that sounds and as much like consumer fraud as that sounds, this is exactly what happened!

And last, this upgrade to the new version is bogus because the company just finished alpha testing their software. There is no new release coming out any time soon. Internet Brands told customers "we need cash NOW. Either you pay us well in advance for software we are not going to show your or you are going to get killed even worse on pricing later."

If there is this much anger, you'll want to investigate why people are so angry.

over 6 years ago

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Hendrik

Really nice article and it shows how disastrous wrong decisions can be. I have been a vBulletin customer for long time and must say that the new licenses are ridiculous.

I think it's amazing that they are selling a product that hasn't even been finished. How can anybody fall for that?

over 6 years ago

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chris

Well, the register itself did link to this thread:

http://www.adminaddict.net/forum/vbulletin/vbulletin-nightmare-4432/

In which there were the following posts:

- http://www.adminaddict.net/forum/vbulletin/vbulletin-nightmare-4432/#post52482

- http://www.adminaddict.net/forum/vbulletin/vbulletin-nightmare-4432/#post52484

- http://www.adminaddict.net/forum/vbulletin/vbulletin-nightmare-4432/#post52506

In which you'll see the support staff outlining the fact that those users were banned not for just a single post, but for numerous repetitive posts on different sections of the vbulletin.com forums. That because of how the "ban reason" works by being attached to a given post, and not a set of posts, a casual onlooker without context may make the assumption that the user got banned for that single post. 

Then you'll see a couple of those users admitting to having been less than constructive, or just wishing they'd been warned before getting banned.

In that light, it's not as black and white as the register reported it. But people being decent just doesn't sell eyeballs as much as controversy does i guess :/ Fair enough.

if you look at the vbulletin.com "Suggestions" and "Feedback" forums, you'll see a ton of threads rife with constructive criticism and suggestions on features and style, with plenty of "Project Tool" destinations where users can file bugs on public betas.

over 6 years ago

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Paul

Just to clear up something posted by Patrico Robles.

"a customer claims very clearly that he was locked out from downloading mods on vBulletin.org even though this access is something that is included with a license"

A vbulletin licence does not include access to either vbulletin.org.

over 6 years ago

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Alasdair Stewart

"In my opinion, Internet Brands should have seen a bad response coming given how they've shaken up the pricing and licensing terms."

"should have" - they DID see it coming. A few months back, there was a "leak" at the vBulletin forums, where a permissions mistake allowed people into the staff only forums - it showed their plans for V4 and most of it is true and still the same. After the leak, people were outraged and vB more or less said they would take on board the feedback and look at changes. They didn't.

http://www.brent-wilson.com/archives/63/

http://www.brent-wilson.com/archives/46/

Some nice quotes:

"4. I agree about the problem if mishandling existing customers, the potential for it snow ball via dissatisfied customers is huge. My head’s blank as to suggestions for this right now, but I’m sure I’ll think of something"

And this is worth a good read: http://www.brent-wilson.com/wp-content/uploads/2009/05/picture13etj.png

http://www.brent-wilson.com/wp-content/uploads/2009/05/picture14cwy.png

So Internet Brands own staff knew this was likely to be a PR disaster. Their own customers told them in advance, based on the leak, it would be a disaster. and Internet Brands / vBulletin did NOTHING to fix that. They made the announcement (and messed it up, as everyone who got it did not qualify for the low $130 price) and then disappeared, leaving the forums to become a war zone.

It's a truly great case study in how not to run a business.

over 6 years ago

Alec Kinnear

Alec Kinnear, Creative Director at Foliovision

Behavior like this is what makes open source more and more attractive.

The only devil I can't get off of my company workflow is Adobe.

Don't get me wrong. I'm quite happy to pay my Apple licenses and my Windows XP licenses.

But I don't want to be relying on someone else's goodwill and good behaviour for core business processes.

Thanks for sharing Patricio. You've been on a tear lately. Keep up the good work.

over 6 years ago

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Aaron

There is nothing one-sided or slanted about this or the article in the Register. I was a vbulletin customer since 2000 and had at one point 8 licenses. The way IB has treated their customers this year is absolutely unacceptable. Ongoing development has been a terrible letdown. Censorship on the forums is out of control. I have had enough and will be VB free by the end of the year.

over 6 years ago

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hotwheels

AZH, You my friend are full of crap. I am glad you are happy with the way vbulletin is headed, but i am not. I am one of the people that Steve Machol banned, and he did so because i was asking questions he didn't like. I was able to show proof of where they were headed before they announced it. Please AZH, stop running around acting like those of us vb banned, had it coming. You need to remember, We PAID for this software, we ARE customers, and some of us ARE NOT happy. With the heavy handed tactic's that are being performed by steve machol are uncalled for and he is only trying to create an atmosphere of happiness. With people like yourself being happy, that's cool. But quit running around acting like we should all be happy with this new direction. Ray Morgan has stolen money from hundereds of people and is trying to force customers into purchasing stuff they don't need nor want. Man, some people are just unbelievable.

over 6 years ago

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hotwheels

"4. I agree about the problem if mishandling existing customers, the potential for it snow ball via dissatisfied customers is huge. My head’s blank as to suggestions for this right now, but I’m sure I’ll think of something" They did think of something, Steve Machol started banning people. Guy should be fired by Mr. Brisco himself.

over 6 years ago

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Boycott vBulletin

". The people who got banned from the forums (not from receiving support for the software) did so due to being disruptive and unruly, and most of the bans have since been rescinded" It looks like YOU are the one that needs to get your facts straight. I, for one, was hardly unruly, and was banned based on Morgan's improperly founded assumption and personal opinion. "Behavior like this is what makes open source more and more attractive." vBulletin is, in fact, open source. Just because it's not free doesn't mean it's not open source. Open Source software is simply editable software, and every part of vBulletin is editable. Have you been banned by vBulletin? post your story . If enough people band together, maybe we can get this nightmare resolved, though it really isn't likely

over 6 years ago

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GA

Amazing.  I participate in one of the communities IB purchased and since that time, the support and dependability of the site have been horrendous.  It is a high traffic community forum and on top of questionable dependability, IB has totally missed the ball on how to support and leverage the very large customer base.  These are people that only know IB's name to disparage it.  Reading this article, IBs communication issues seem to cross all their business lines.  This is an organization that really needs to step back and figure out what they want to be in the future and whether they can achieve those goals with their current customer service levels and poor communication practices. 

over 6 years ago

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Sludge

GA, I also have been a participant for about five years on a forum that Internet Brands bought a little over a year ago.

Historically the site members and the owner worked together to make the site the best it could be, but since the IB purchase the relationship between the users and the new owner (IB) has been at best adversarial.

Large portions of the site that used to work perfectly no longer work at all, and there is no one to turn to who seems at all concerned. Sadly a site that was showing steady growth and user dedication has "turned around" with members posting less, complaining, and moving to other sites without "the IB problem."

IB's communication and involvement with their end users is decidedly lacking, and it shows with their actions on the vB forums, also.

over 6 years ago

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Robb M.

Sludge, which site is that? GA, which site are you referring to?

over 6 years ago

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