Tag Archives: Open-Source

Free WordPress makes $45mil per year, but how?


With more than 74.6 million websites build on it, WordPress is the most used content management system(CMS) in the world. Of all self-hosted websites, 18.9% is build on WordPress and 70% does not work with a CMS. The guy behind this extremely successful system is Matthew Mullenweg and Mike Little. But they did not build all 30.000+ plugins, 100.000+ templates and uncountable custom widgets by themselves. Matthew and Mike co-created: they used the crowd to make their CMS an indispensable building-block in the world of internet. In this blog I will explain how WordPress is generating revenue by the use of its crowd (developers of plugins and themes).

WordPress was released on the 27th of may, 2003.  Back in the days, the internet was still a relatively new environment. Building a website demanded advanced skills in code-languages such as HTML and PHP, in working with hosting accounts and for a fancy webdesign with Adobe Photoshop. You can imagine that relatively a few early-adopters auto-didactically obtained these skills: NERDS. Matthew and Mike wanted to change this status quo. Their initial idea of WordPress was to lower the enormous threshold for normal (non-tech) people to build their own blog. Obviously, they succeeded. But thanks to thousands of developers, WordPress supports countless website-types next to blogs: regular business websites, webshops (WP E-Commerce), social media platforms (BuddyPress) and more.

Nowadays, WordPress itself is an open-source system, does not use any obligated advertisements and is free to download. Matthew and Mike apply four interesting business models on WordPress:

  1. Offering High-End Hosting
    WordPress offers space on the internet on their own servers. In addition, WordPress provides professional service for large multinationals. Customers are among others, CNN, TED, Dowjones, UPS and Times.com. Taking a look on WordPress VIP Hosting, we see prices tarting at $15.000 dollar per month. So, one business model is based on a simple service provider.
  2. Premium Templates (Web-designs)
    If you build a website based on WordPress, it is not necessary anymore to design your entire webdesign yourself. WordPress offers many premium templates, which are easy to install yourself. One template costs approximately $50.
  3. Premium Accounts
    A wordpress blog is free, but extra space for media or a domain (.com/.nl etc) costs money.
  4. Google Advertisements (Google AdSense)
    WordPress has the right to post Google Adsense advertisements on free WordPress blog. However, this is only done under certain circumstances.
  5. And more…
    Next to these major 4 business models, WordPress provides various other paid services. Most of them are linked to a premium model (such as paid plugins).

Interestingly, WordPress positions itself as a free open source CMS system. However, for a small percentage of the users Wordpress is charging fees. Relatively, this might solely be a small part of the users, but taking the numbers mentioned at the beginning of this blog into account, you can imagine that the absolute earnings are huge. The company behind Wordpres (Automattic) made $45 million revenue in 2012 and is growing rapidly (last publicly available data). Knowing how WordPress is born and evolved, Matthew and Mike should thank the user for building their internet-empire.

Tip:
Want to build your own WordPress website? (CHECK VIDEO BY Tyler Moore).

1. Open a WordPress account at www.wordpress.com
2. Install a free theme or download a premium template from e.g. Themeforest.com.
3. Check the plugin page for additional functionalities.

Trick
Want to know whether a website is build on WordPress?
Put the following text behind the internet address: “/wp-admin/”. If you get a login-page, you know the website is build on WordPress.
E.g. www.bijlesmatch.nl/wp-admin/

References:
1) World Bank Database
http://data.worldbank.org/indicator/IC.BUS.NREG/countries/1W-EU?display=graph

2) Manage WordPress
https://managewp.com/14-surprising-statistics-about-wordpress-usage

3) Matt Mullenweg WikiPedia
http://en.wikipedia.org/wiki/Matt_Mullenweg

4) WordPress VIP Stats
https://vip.wordpress.com/stats/