Feedly raises $500K in 8 hours selling RSS service subscriptions

There is money to be made in the market that Google abandoned

The Feedly RSS service raised half a million dollars Monday, pulling in an average of more than $62,000 in subscriptions each hour over an eight-hour span.

Two days ago, Feedly kicked off a paid version of its RSS service by offering $99.99 lifetime subscriptions to the first 5,000 customers.

Later in the day, Edwin Khodabakchian, CEO and co-founder of DevHD -- the company behind Feedly -- said that the 5,000 accounts had been snapped up in eight hours. The total to Feedly: almost $500,000.

"The funds from this early edition are going to help us acquire the hardware needed to open Feedly Pro to everyone," said Khodabakchian in a blog post.

Feedly became one of the most popular alternatives to Google's Reader after the search giant announced in March that it was abandoning the RSS service that had powered not only its Web-based program but also virtually all third-party RSS software. Since March, Feedly has created an API (application programming interface) of its own that mimicked Google's, beefed up its hardware infrastructure and for the paid version, built a search functionality from scratch.

Search was touted as one of the biggest selling points of Feedly Pro, which will soon open for subscribers who missed the lifetime deal. Feedly Pro will cost $5 per month or $45 annually.

The free version of the service will remain in place, and new features will be added to it, Feedly has promised. First on the list: HTTPS support, another of the Pro-only features for the moment.

When Google pulled the Reader plug, it cited declining use. Long-time users, however, complained loudly, to the point of launching several online petitions pleading for Reader's life. One of the first petitions eventually collected more than 150,000 signatures.

To no avail.

At the time of Google's announcement -- and as users scrambled for alternatives before the July 1, 2013, kill date -- pundits opined that free services were ephemeral, and like Google's Reader, could easily be orphaned or killed. Instead, they urged users to pay for the online service they needed.

That wasn't the tone of the comments appended to Khodabakchian's blog post.

While some bemoaned their tardiness in jumping on the lifetime offer, far more said that Feedly Pro's planned prices were too high, considering what they paid for other services.

"I would have paid $1 a month for it, but $5 is way above my threshold," said someone identified as "albeec13" on Monday. "I pay $7 for Netflix, for example, and it has far more to offer than a news reader."

"Nice to have Pro version but $5 per month look[s] too expensive," echoed Lucas Janin. "$5 is what I pay for unlimited backup of my computer ... if it was cheaper, like $2 [per month], you will get much more subscribers."

Replying to those customers and others, Khodabakchian urged them to continue using the free version and reconsider in the future. "Hopefully, over time, we can add enough value to your Feedly experience that $5 [per month] becomes acceptable," he wrote Monday.

Khodabakchian co-founded DevHD with Cyril Moutran in 2006, and they launched Feedly in 2008. Before that, Khodabakchian worked at Oracle as a vice president of product development, according to his LinkedIn profile. For four years in the late 1990s, he was a software architect at Netscape, the forerunner to Mozilla's Firefox browser.

Moutran also worked at Netscape as a software engineer during the same period.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Copyright © 2013 IDG Communications, Inc.

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