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What’s Up WordPress?

Wordpress
From the just wondering file….In January 2008, Automattic – the company that runs WordPress – raised $29.5-million of venture capital but it’s difficult to tell how that money is being used.

Some of it went to cash out the founder’s stakes, and some has extensibly been spent on small acquisitions such as PollDaddy. But that should still leave a big chunk of cash in a company that arguably hasn’t done much over the past 16 months other than a few platform upgrades.

I mean, we’re talking about a company with less than 40 employees that operates fairly lean and mean. Sure, there’s server costs to support millions of blogs on WordPress.com, and Matt Mullenweg’s modest travel costs as he spreads the word about WordPress around the world but we’re probably talking about a burn rate of maybe $5-million/year.

What’s been surprising since Automattic raised the cash is how there seems to be little progress in monetizing the platform. From what I can tell, WordPress is still making money the same ways as it did pre-$29.5-million. And while it apparently makes some money from AdSense, Automattic really hasn’t leveraged its WordPress traffic yet in terms of advertising.

Don’t get me wrong, Automattic made a good move by taking the money while it was on the table and they’re smart to be pragmatic about how they spend it but you’d think it would have done more with it.

By the way, ReadWriteWeb reports that WordPress is looking to crowdsource its usability testing. I guess that’s another way to save a few bucks.

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  • http://www.newcommbiz.com Tac Anderson

    A few things that come to mind is that Automatic has made several key acquisitions, IntenseDebate, PollDaddy, and Gravatar and I don't think they're done yet. Plus since they just rolled out BuddyPress, I bet a significant amount of dev time and money went to that. Finally WP makes more money than people realize leveraging their software to build large Website like the New York Times. And yes if they're smart (and they seem to be) then they're hanging onto their cash right now.

  • http://intensedebate.com/people/photomatt photomatt

    Right now we're focusing more on creating value rather than capturing value (monetizing). I also don't think advertising is a particularly interesting place for us to be.

    If you want a pulse of what's going on with WP my blog is a good place to subscribe. Big public developments right now are BuddyPress, P2, and WP 2.8.

    • http://intensedebate.com/people/markevans markevans

      Thanks for the update. Looking forward to seeing WP 2.8.

      Mark