(FORTUNE Magazine) – PYRA LABS Blogging software www.pyra.com

Nothing destroys productivity like blogs, the frequently updated online diaries that have exploded in the past year. Blogs, short for Web logs, run from the personal (dating life in St. Louis) to the political (views on Arafat) to the arcane (diseased bees in Virginia Beach). The company behind the trend is Pyra, a minuscule operation in San Francisco that runs Blogger.com, the most popular tool for hosting and posting blogs, with almost 600,000 registered users. Pyra's CEO, Evan Williams, 30, talked to FORTUNE from his apartment-cum-office in San Francisco. --Daniel Roth

Q: What was the idea behind Pyra?

A: Originally, we formed Pyra to do groupware Web applications. From day one we had an internal company blog and had written little scripts to automate that; we did the same thing on our personal sites; then eventually we had a public company blog. It didn't seem that significant, but we already had [the Blogger tool] sort of written, so we figured we'd toss it out as a side thing and then go back to what we were really working on (laughs).

Q:When Blogger caught on, did you give up the other efforts?

A: For several months we straddled the fence. But after thinking about Web logs, it occurred to me that they were a lot more profound than I originally thought. We ramped up a bit and raised $500,000. At the end of 2000 we started getting a lot more press and started having scalability problems. And then we ran out of money. In January 2001 everybody left but me.

Q: Why did you stay around?

A: From a financial perspective, it got a hell of a lot easier when everyone left. I had to pay myself, and for bandwidth, server, and rent. But 95% of the costs--payroll--were gone. We got rid of our office last August.

Q: How did you rebuild?

A: I wrote an essay [on his personal blog, Evhead.com] that said, "Everyone's gone but me." It wasn't a call for help, but I got a huge outpouring of people replying. One was from Dan Bricklin [CEO of Trellix, which cut a deal that helped keep Pyra afloat]. By the beginning of this year we launched our subscription version, Blogger Pro. We now have a service that's paying for itself and funding development.

Q: Where are you working now?

A: Still in my home, but we have four other people now. One, an administrative assistant, is in my kitchen.

Q: How many blogs are out there?

A: We have 100,000 active blogs, three times more than last year.

Q: Where do you see Pyra in five years?

A: I have a hell of a problem thinking five years out. The whole reason that I started a company was to build cool s--t that matters. I'd like to be a player in how the Web is evolving.