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So How is WordPress Going to Make Money, Matt?

It’s difficult not to like WordPress (especially if you’re a blogger!) but after its parent, Automattic, raised $29.5-million earlier this year, there was a fair bit of head-scratching out why it needed so much dough and how its investors (including the New York Times) justified a valuation rumored to be $200-million.

We’re talking a company with 19 employees and revenue of perhaps a few million dollars from offering consulting and anti-spam services. The easiest and most obvious way for WordPress to generate more revenue to grow and keep its new investors happy would be advertising given WordPress.com powers 2.2 million blogs, which attract 114 million unique visitors and 482 million page views a month.

Based on a very conservative $2/CPM, WordPress could make $1-million a month – $12-million a year – by running a single ad on all of its WordPress.com blogs. The problem, however is Automattic chief domo Matt Mullenweg doesn’t like the idea of advertising on WordPress.com – a strange approach given online advertising all the rage these days, and you would think WordPress.com users wouldn’t squawk too loudly given they use the publishing platform for free.

“Most of you have never, and will never, seen an ad on WordPress.com,” Mullenweg said during a conference yesterday.“We decided to show ads only on certain pages, only to the people who were sort of random drive-by visitors…if you use Firefox, you’ll never see an ad, no matter what, mostly because I like Firefox.”

Question: why the opposition to advertising, Matt? I mean, everyone’s doing it and advertising is apparently going to let everyone enjoy all those free online services that we all know, love and adamantly refuse to pay to use.

So, Matt, if it isn’t advertising, what is WordPress going to tell the New York Times, which has dropped its pay-wall so it can drive traffic and attract more advertising revenue?

And if it’s not advertising, what’s it going to be? Consulting, which is people-intensive because the more you grow, the more people you need? Services? WordPress is now giving away 3GB of storage, and there’s no sign of a fee-based services portfolios being developed.

To paraphrase that old Wendy’s tagline: Where’s the Beef, Matt?

More: Speaking of blogging and revenue, Technorati’s going to be launching an advertising network.

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  • http://bloggingmebloggingyou.wordpress.com Ed Lee

    as someone with a wordpress hosted blog, there are a few ways wordpress is monetizing:

    access to CSS – $15 pa
    unlimited private users – $30 pa
    storage upgrades – $20 pa for 5gb; 50 for 15 and 90 for 25

    what else could they do?

    - offer adsense for a monthly fee
    - one stop shop living dot style domain buying and mapping for your wordpress blog
    - enterprise installation for apps like prologue

    plus many more that people far smarter than me can think of.

    Ed

  • http://ma.tt/ Matt

    That’s an easy one: we’ll do it in the ways that our users ask for.

    The context wasn’t that I dislike all advertising, in fact my girlfriend works with ads every day, I just don’t like showing everyone ads all the time and compromising the user experience and long-term profit for short-term gain.

    Fortunately our investors are in it for the long run as well. How sad it would have been if Google put $2 CPM banner ads on search results? Blogging is a unique medium, and I think we can do better than the situation you describe.

  • http://www.markevanstech.com Mark Evans

    Matt:

    Thanks for the feedback and insight. I’m looking forward to seeing how WordPress – the business and the platform – will evolve.

    Mark

  • http://ma.tt/ Matt

    Me too!

  • Geoff

    Mark – I think this post by Umair Haque relates directly to the question at hand.

    Ads foster fatigue, so invest in your clients, don’t abuse them.

    I love the Internet. Such easy access to people who are so much smarter than me…

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  • http://scabr.com Scabr

    I think WordPress ad model will be close to Facebook one.

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  • http://www.jimkukral.com Jim Kukral

    Matt,

    What about your bloggers? You’re saying none of them want any way to earn even just a few bucks?

    http://www.scratchback.com/blog/matt-mullenweg-scratchback-will-work-for-wordpresscom/

  • http://chuckboyce.blogspot.com Chuck

    WordPress and k2 are my default choice whenever I need to build a site. I am at a point where I either need to grow skills in CSS or hire someone to enhance the presentation layer of the wp front ends that I have. I would gladly pay wp for either code or consulting help that would lead to more appealing front ends.

  • http://microchunk.tv Misty Olen

    I like Matt’s thoughts on advertising. It seems like he’s not afraid to do something different than everyone else and that is pretty cool.

  • http://network.wordpress.com Daniel Schildt

    I too have been thinking about how WordPress.com will work in future. But as it looks, it is evolving to blog service provider that can be used as platform for much more than just blogs. When you remember that with little extra you can add your own domain and customize look of site to your own, it really starts to remind me of how much this reminds different kind of hosting company.

    Instead of requiring everyone to think about how backend systems works, they are focusing on the users and this way allowing lower entry to the world of web publishing. After people have learned how to use basic tools, they can transform their content to totally different look of their own (mayby with help of Automattic’s customizing services or someone else). Anyways, in long run this looks like viable business model. While it takes some time for people to realize possibilities of using it instead of having to buy seperate account for website.

  • P

    WordPress lives on Google Adsense… and makes a lot of money from it.
    Here’s how:

    http://pascal.vanhecke.info/2007/11/21/making-money-with-adsense-without-annoying-the-community-wordpresscom/

    In fact, quite a few sites are applying the same technique nowadays with the “Who Sees Ads” WordPress plugin.

    It turns out that if you limit ads to people coming from search engines, Adsense income increases although impressions decrease, due to Google’s “Smart pricing” technique.

  • http://www.buzzpal.com chrisco

    Many, many people would bail if they required advertising (or payment not to have advertising). There are too many alternatives. Definitely some people would stay, but many would switch and some would post written and video tutorials on how to switch and suggest who is the best alternative, why, etc. It would be bad, bad, bad for WordPress. Of course, I am talking my book, as they say, as I use wordpress and I want it to remain free and ad-free. I switched from TypePad because it was not free and there were so many good alternatives.

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  • http://TrafficNymphomaniac.com Robert A. Kearse

    Affiliate sales of blog related products.

    This can be done through free reports or viral ebooks.

    If all Wordpree did was mail to its opt- in list members weekly with info that SOLVED A PROBLEM or FULFILLED A NEED, then it could include a commercial message a third of the time to produce substantial revenue.

  • http://drmikessteakdinner.com Dr. Mike Wendell

    wordpress.com also has their VIP program for top level bloggers. They removed the pricing and are now quoting it as flexible but it used to be like $500 setup and $250 a month.

  • http://www.pennyjobs.com Curt

    WOW. So, WordPress is displaying Google Adsense ads under certain conditions on the 2.2 millions blogs running on their platform and few people even realize it.

    Thanks for the insight.

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  • http://www.bankruptcyprotections.net Roell

    Your info is very useful and your blog is excelent. thanks

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  • http://www.yourhmoexpert.com HMO

    Thanks for the feedback and insight. I'm looking forward to seeing how WordPress – the business and the platform – will evolve.

  • http://www.moneyreview.org ProfitLance

    Curt: Yes, one of the ways in which wordpress make money is showing google ads to his users.

    Anyway, keep in mind that there are certanly hundreds of other methods used by WP to earn money from they visitors.

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  • MIDGR.COM

    Only $200 Million for WordPress? Are you guys crazy! If they would start selling this commercially the company could easily value for more than $20 Billion USD. Do you have any idea how many sites run on WordPress these days?

  • http://babyfishercat.blogspot.com/ babyfishercat.blogspot.com

    They won’t start selling wordpress commercially…its free and most likely always will be for the basic platform