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the vBulletin’s own support forums – not to mention third-party forums and blogs – and over the weekend, the company rescinded the support forum credentials for at least a handful of these users.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

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.