$7.5 Billion – That is the total valuation of WordPress. How could this be possible when the CMS is completely free?
I hope you are here with the same question in your mind, and I’m happy to help 😄.
Let’s start, but first, you need to know about what WordPress is and its types. Yes, you read it right, there are two types: WordPress.org and WordPress.com. This would help you understand the business model of WordPress in a better way.
Understanding the difference between WordPress.org and WordPress.com
What is WordPress.org?
WordPress.org is the popular Content Management System which you must have heard about, and it is completely free to use. Users can create their own website using the themes and plugins present in the WordPress.org library. You can also publish content freely with lots of design features and other functionalities.
This requires you to go through a slight learning curve, where you have to understand how to put things in the right place, so that everything together works like a charm✨. There are many articles on the internet which give you the basic understanding, this includes us as well. We have curated articles for you in chronological order on our “Beginners guide” section.
It is open source software. Open source means anyone can freely access the code and make their own contributions to it.
WordPress is a GNU/GPL (General Public Licensed) software. The license comes with various advantages and benefits like:
- WordPress is freely available for anyone to use.
- You have complete freedom to modify or tweak it as per your requirements.
- The GPL license ensures that WordPress will always remain free and open source. This means that it can never be “taken over” by a single company or individual.
- You can just remove/change the logo and name and start selling it. And that’s completely legal!
Thousands of independent developers have made WordPress.org freely, without any direct compensation. No specific person or organization owns it. It is safe to say that the community owns WordPress.
What is WordPress.com?
WordPress.com is a freemium hosting service that offers easy set up for WordPress websites. It lets bloggers with limited technical knowledge to blog without any hassle. Just login, pay, and you are all set for publishing articles.
It helps bloggers focus solely on content rather than concentrating on software installation, customization, security, and backup checking.
A private company called Automattic owns WordPress.com.. Matt Mullenweg founded it in 2005, two years after WordPress, with the goal of simplifying WordPress hosting and enabling individuals with minimal technical expertise to launch a blog with WordPress.
It’s important to note that Matt Mullenweg is the CEO of Automatic and also serves on the board of the WordPress Foundation.
In a nutshell, the distinction is as follows:
Think of your website as a bicycle. WordPress.org provides you with the parts of the bicycle. You have to assemble it and maintain it by yourself. WordPress.com gives you the assembled bicycle as well as timely services for your bicycle as per your subscription plan.
WordPress.org Business Model
If WordPress.org provides completely free themes, plugins, and features. How is WordPress able to provide all the updates and maintain the service if it is not earning from the platform?
The one word answer is “donations”. Following the success of WordPress, a large number of WordPress development companies began selling WordPress-related services and products. Also, there are many companies whose services depend on the existence of WordPress; without WordPress, these companies would become futile.
They donate for the betterment of WordPress. They want WordPress to be the biggest holder of market share. Hosting service providers like Bluehost, HostGator, Hostinger, GoDaddy, etc,. and plugins like Yoast SEO, WP Rocket, etc., also donate a significant amount to WordPress.org
There are also developers, testers, designers, writers, and so many other people who work around the clock to make WordPress a better place. We call them “contributors”.
What motivates contributors to contribute?
The team behind managing WordPress platform or core software, its upgrades, feature additions, integrations, maintenance, and everything in between is a community of open-source enthusiasts and evangelists like, you and me! Best part, contributors do not receive any kind of payments, hehe. Still, there are hundreds of contributors who regularly contribute to the platform.
Why do they do it?
The reasons can be divided into three major categories:
- Gratitude – The reason might be that they have personally benefited from using WordPress and want to give back to the community that has provided them with such a valuable tool.
- Personal growth – Who would you hire first for a WordPress project – a random programmer or someone who has been contributing to WordPress for a few years?
Free and open source software in general is an excellent way to learn new technologies and specialize in them. Even if you work alone, you will be participating in a project with a lot of professionals from whom you can learn and share information, resources, and experience.
- Professional growth – There are many organizations that create (plugins, themes, and websites), sell products and provide services on WordPress. In other words, they don’t get paid by WordPress, but they make money through WordPress related services.
WordPress.com Business Model
WordPress.com business model can also be referred to as Automattic’s business model. They beautifully craft a business model around WordPress, offering various products and services. I have listed some popular ones, which play a major role in filling the big bags 💰 of the organization.
- Web Hosting – WordPress offers web hosting services named “WordPress VIP Hosting” to big brands like CNN, TechCrunch, Time.com, and more. The pricing for this hosting starts at $15,000 per month. Yes, that’s a hefty price.
- Google AdSense – Free blogs hosted on WordPress.com carries Google Adsense ads and the revenue goes to WordPress. The Google ads will appear to the consumers when these three conditions are met:
- The visitor is not using a Firefox browser.
- The visitor must be logged out of his WordPress account, if they have one.
- The referring source is not a WordPress powered website. So, if you land on the abc.wordpress.com site from xyz.wordpress.com, visitors will not see any Google Ads.
Even with all these conditions, WordPress still generates a significant amount from Google Ads.
- Premium plans – As mentioned before, WordPress offers freemium plans to its users. Anyone can host a blog on WordPress for free, but if you want to buy additional storage space for the multimedia files or wish to use a custom web domain instead of the default wordpress.com sub domain, then you should go for these premium plans.
- WordPress themes – The WordPress theme directory offers premium themes that approximately costs you between $50 to $100. These are GPL compatible themes developed by third- party WordPress developers. Automattic gets a cut for every sale of this WordPress theme.
- Web Host Referrals – WordPress.org suggests a list of third-party web hosting providers, so that you can self-host your WordPress blogs for a yearly fee. When you subscribe to the hosting providers using these links, Automattic gets a commission.
- WordPress Support – If you need help with WordPress and the free support forums aren’t serving the purpose, then there is an option called “ WordPress VIP Support ”. Once you become a subscriber, the WordPress development team will help you solve problems and the response time can be as low as 6 hours. This service is primarily for enterprise users who are willing to spend $2.5-5k per year.
- Jetpack – If you wish to move your blog from WordPress.com to WordPress.org, Automattic has a tool called Jetpack that helps you to migrate for a one time fee of $119. Jetpack also provides other services like backups, automated file repair, site restoration, file scanning, and spam defense.
- Crowdsignal – Automattic also has a plugin called Crowdsignal that allows you to create and manage polls right within the block editor. It provides a premium version where you can have an unlimited number of questions per survey, without any watermark.
- VideoPress – The VideoPress plugin for WordPress lets you host videos and audio files on your own website. The plans for this plugin begin at $60 per year. The videos have no ads and support HD playback as well.
- Akismet – Spam is the most annoying thing for a website owner. To avoid that hassle and save your time from filtering and deleting hundreds of spam comments, Automattic created Akismet.
- Akismet is a spam catching technology that is free for non-commercial personal blogs. If you maintain a corporate blog or run a network of blogs then you are required to buy a commercial license, which starts at $9 per month and extends up to $209 per month.
As we understand the monetary side of WordPress, it becomes much easier to see how it all works out to become a living and breathing organism. You too can take the matter in your hands and start creating a monetary source using WordPress.
In case you’re wondering where to begin, well, it totally depends upon your interests, whether you’re into developing, programming, designing, etc. WordPress has a lot of growing and earning opportunities to offer.
Comment what you think about WordPress’s business model and what’re your thoughts about it? Till then subscribe to our newsletter to get more interesting reads and insights!