December 12: The blog and web builder WordPress
WordPress is the prototype of an open source business model: On the one hand, there is a compelling technology used by millions of people. On the other hand, WordPress has made the inventor fantastically rich.
The content management system
WordPress has also made it easy for IT laypeople to run their own blog or website: you get a domain and web space and install the software with just a few clicks. The website builder has become the quasi-standard for blogs and is also built into many other web formats.
From December 1st to 24th, brief portraits of open source projects will appear on heise online. They deal with the functions of the respective software, the pitfalls, the history, the background and the financing.
43 percent of all websites run on WordPress. The software is licensed under a GNU GPLv2 license. The standard layout and the simple blog post-by-blog post structure can be changed with themes. There are around 9000 design templates in the WordPress database. 60,000 plugins can expand the range of functions and, for example, enable surveys, protect against spam or integrate analysis services and advertising networks.
The WordPress company Automattic offers a desktop application as well as apps for Android and iOS.
WordPress is a triangle constellation of the founder’s company, a foundation and a community. In 2004, US developer Matthew Mullenweg released version 1.0 of the software. This was a further development of the blog software b2/cafelog. Mullenweg has been developing WordPress with his company Automattic since 2005.
The WordPress Foundation
The WordPress Foundation was founded in 2010. The foundation holds the trademark rights to WordPress and supports the worldwide community. It has a minimalist structure: For 2020, it shows earnings of only about 11,000 US dollars. As can be seen from the detailed annual report for 2019, it has no employees. The board consists of three people whose activities are not remunerated. Mullenweg is the chairman.
The main activity is handled through a foundation subsidiary, the WordPress Community Support, PBC. It collects money from sponsors or through ticket sales and supports community event formats – wordcamps, meetups and WordPress business models. In 2020, 33 WordCamps were supported with around $600,000, these are locally organized community conferences. $250,000 went to WordPress Meetups.
A map from do-it-yourself events service Meetup lists 757 groups with 475,000 members in 110 countries. In 2018, before the start of the Corona crisis, the WordPress Community Support continued to sponsor the events with around 4.6 million dollars.
The community consists of volunteers, but also agencies, IT companies and freelancers who earn money with WordPress: They sell WordPress support, set up blogs for companies or offer paid premium themes and plugins. The hands-on page on WordPress.org presents various ways to get involved: You can work on the code, translate, organize events, check submitted themes, answer questions in support forums or develop plugins.
Founder company Automattic
The company Automattic of the founder Matthew Mullenweg with about 1,800 employees is the third pillar next to the foundation and the community. Employees of the San Francisco-based group develop the software and apps. The company earns money with products and services related to WordPress.
The most prominent product is the blog host WordPress.com. You can run a blog there as a subdomain for free, on which Automattic places advertising. For more extensive requirements, there are subscription models that range between four and 45 euros per month and include various premium functions: you get your own domain, you can upload videos, integrate Google Analytics or accept payments. Blogs can monetize their reach via the Automattic advertising network WordAds. “WordPress VIP” prices for enterprise solutions start in the low single-digit thousands.
In addition, Automattic has several dozen subsidiaries, most of which also earn money around WordPress. For example, Jetpack offers malware scanning and spam protection for comments and forms. Other subsidiaries specialize in premium themes and plugins, such as the ecommerce plugin WooCommerce. Automattic also owns the formerly large blogging platform Tumblr, the forum software BbPress and P2, a collaboration tool for companies. Automattic is also involved in the start-up behind the Messenger project Matrix.
Start-up worth billions
Automattic itself is still a growth company. In total, Automattic has raised nearly $1 billion from venture capitalists, as Crunchbase has compiled. In mid-2021, the company was valued at $7.5 billion.
Automattic writes in the press area that they are in a “later-stage growth phase” – the final phase of a startup cycle. The logic of venture capital financing provides that lenders gild their investments after a few years through an “exit”. Through an IPO or by buying up the start-up. This could also happen with Automattic. When US media outlet Protocol.com asked Mullenweg about IPO plans in August 2021, Mullenweg laughed and said the journalist should just write down a “standard response from a CEO.”
However, the balance of power in the large WordPress company is balanced. In his blog post on the last round of financing, the founder writes that he has sold company shares continuously since 2011. However, the voting rights that are actually linked to the shares remain with him.
Open source can be big business
WordPress is the best example that releasing software doesn’t mean you have to volunteer or live on donations at low levels. Open source can also become big business. It is not known how many shares the founder Matt Mullenweg still holds. However, it should be so much that he is fantastically rich on paper, or after an exit, also on the account.
At the same time, WordPress is a gift to the internet. Technology has also opened up the web for non-professionals and created a huge ecosystem in which people volunteer or make money themselves with the technology. Due to its open source construction, WordPress has become a core infrastructure of the web.
The work on the series of articles is based in part on a “Neustart Kultur” grant from the Federal Government Commissioner for Culture and the Media, awarded by VG Wort.