Automattic is reaping the rewards for years of hard work. Automattic is the company behind comment spam filter Akismet and WordPress.com, and of course the magnificent open source blogging software started by Matt Mullenweg. But how do they make money from their free blog hosting service?
The answer: like everybody else – Google Adsense. Still you probably have never seen a single ad on their pages… Here’s how they do it:
Cherish regular readers – they are your writers-to-be
If you’re a regular reader (let alone poster) on WordPress.com, cookies will prevent you from seeing ads. Regular readers don’t click ads anyway, they’re there for the content. Ads would be off-putting and keep readers from becoming contributors.
The small loss in revenue on regular readers is by far offset by the growth in “content inventory” if you can turn readers into writers. First build the community, then monetize. (I thought I remember Matt linking to a similar argument by the founder of Metafilter, but I can’t find the referring post anymore.)
Only show ads to searchers
Chances are you never visited Kris Hoet’s blog* – Kris is EMEA Marcom man for Msn/Windows Live. Although he has it mapped on his own domain crossthebreeze.com, the blog is hosted by wordpress.com. Yet if I refer you to his holiday report, you won’t see any ads either, even as a first time visitor, even if you delete your crossthebreeze.wordpress.com or crossthebreeze.com cookies (this cookie-killing Firefox extension will save you time).
You might not be a regular reader (yet), but you didn’t go there to see ads, you went there because I referred you to what you expect to be a holiday report. WordPress.com doesn’t want to spoil your first impression of Kris’s blog.
However, if you land there by accident after a Google search, things are different.
You’re quite likely not to be interested by his blog, but more by bars in Kota Kinabalu… The served ads (fitting your search terms even more than the content of the post) offer a convenient click away. (Notice how the “Ads by Google” caption is even more inconspicuous here, probably because of some preferred partnership?)
Exploit the masses, spare the geeks
Still don’t see the ads when you click through from the search page (after some cookie-crumbling)? Aha, but you’re using Firefox, right? (Or Flock, or another minority browser…)
Geeks like you are probably advertising-resistant, and notoriously loud and outspoken. Rather than facing criticism from troublemakers that don’t click ads anyway, WordPress prefers not to show them at all… Unless you fake your User Agent and do the same cookie-cleaning and search procedure over again…
Now that’s really all for the hoops you have to jump through, in order to enjoy the privilege of being served ads on WordPress.com!
Cash in on derived content: tag pages
Another stroke of brilliance are the WordPress.com tag pages. Tag pages aggregate (excerpts of) postings with a particular category or tag (see their explanation) across the WordPress.com network (whereas tag pages on self-hosted wordpress blogs are internal links in your blog).
See the tag page for “Emergent Church” as (arbitrary, I swear!) example . They’re a searchengine’ s Gefundenes Fressen: tags are typically the keywords you use in search queries as well, and here you have pages optimised for such a keyword, with lots of inlinks from relevant posts using that keyword as anchor text, on a high-authority domain. What’s more, since tag pages are the result of coincidental co-production, no community member will dispute the site’s owner’s right to exploit this no-man’s-land.
I used to see a lot of these pages in search results (especially for non-English queries) and I guess this has been a gold mine for a while. Google however is seriously pushing back tag pages nowadays (or maybe on over-optimised pages as well…). Tag pages can be considered search result pages by themselves… and who wants to see search results in search results? (See a similar argument on Technorati tag pages.) Still, they do show up, although you might need to fiddle a bit to get a first-page result:
Paid accounts profitable?
A lot of other community sites are using the same techniques, yet none pushing it as far as WP.com… Apparently the strategy is successful to that extent that I’m wondering it will ever be worth their time to offer completely ad-free blogging accounts. Would people be willing to pay the equivalent or more of the advertising income their blog generates – after all, they never see an ad on their pages themselves?
I guess people like Kris Hoet might well be interested for reputation reasons, but maybe this market is not big enough to offer paid, large-scale, low-cost blog hosting?
* I’m using Kris as my guinea pig here as a late follow-up to a discussion we had at a bloggers’ meeting a long time ago.