Automattic Gets $300M Investment, Now What?

Automattic, the company that runs WordPress.com and many other services like JetPack, WooCommerce and more has received $300 million USD in funding from Salesforce. From TechCrunch:

Automattic, the company behind WordPress.com, WooCommerce and soon Tumblr, has closed a $300 million funding round at a $3 billion post-money valuation. The Series D round has a single investor, Salesforce Ventures.

First off, congrats at Matt Mullenweg and the Automattic team on this round. That’s a large investment and Salesforce is an interesting, and sole partner in this investment. This will improve services, integrate new acquisitions like Tumblr, and create more jobs. All good things. I’d love someone to invest anything let alone several hundred million dollars in my company.

VentureBeat says this about the deal:

Reading between the lines, it’s not hard to see why Salesforce would invest such a gargantuan sum in a company best known for blogging. WordPress currently powers one-third of the web, which includes everything from small-time bloggers to publishers and online retailers. And several products in Automattic’s arsenal hint at the reasons Salesforce has elected to invest in the company.

What does this mean for you?

The question I’ve been thinking about all morning is this: what does this fundraising mean for those of us who use, develop for, and are deep in the trenches with WordPress. I think the answers are good and bad.

To start, it means more ads. I don’t mean display or text ads are going to start populating WordPress. Instead,  you are going to see an increase in the promotion of Automattic’s services and offerings in products like WooCommerce, product directories and more, putting their products in front of tens of millions of WordPress users, admins and developers.

You may have already seen this in action. This Spring, WooCommerce started pushing their plugins and add-ons as “recommended extensions,” and surprise, they’re all Automattic/WooCommerce owned ones. About this new type of “ad,” Erik Bernskiold said this:

“I get that WooCommerce want to benefit from their commercial side, too, and there are many ways to do this. But in this case, it feels like this is at a great disregard for the users. Hijacking a product list, order list or a user interface element in this way is a major interruption of the user experience. It’s not the place for an ad.”

I understand that Automattic bought WooCommerce, and it’s their platform, but for many people, they feel the manipulation of a set of results goes against the open nature of WordPress.

The rise of plugin nags, upsells and banners

This happens in the Add Plugin area of WordPress as well. Look at the “Featured” tab — 2 of the 5 plugins there are paid services from Automattic (Akismet and JetPack.) Switch to the “Recommended” tab and you see WooCommerce in the first position.

In addition, there’s been a very rapid increase in the use of upsell alerts, banners and other annoyances by WordPress plugin makers lately. What’s keeping a widely used tool like WooCommerce to start advertising other Automattic services, like the recently acquired ZBS CRM?

 

They wouldn’t do this, people will say. No? The over $500 million that they’ve raised for their company isn’t a gift — investors expect a several-multiple return on that investment. So, Automattic has to make money. They do that by selling services like WordPress VIP, WooCommerce add-ons and so on.

Governance is Key

It’s these kind of possibilities that makes the push for improved governance over the WordPress project more important than ever. There are some key issues that need to be communicated, debated and solutions offered to the community. There are many, but I’d include topics such as the expansion of nags like the ones I mentioned earlier. There’s the issue of auto-updating old WordPress installations, and the pros and cons of doing that. And finally, there’s accessibility.

I don’t think the accessibility issues around Gutenberg at the launch of version 5 of WordPress were handled particularly well. There have been a million blog post and tweets both for and against the launch in general as well as about the accessibility issues. Thankfully, organizations like WPCampus raised money to fund an accessibility study to identify issues with the hope they would be fixed. (Note: I donated to that campaign.)

WordPress (.org) is open source, and needs formal and stable governance. It powers so much of the web it needs oversight to keep it free, open and not under the control of one company.