Now, it all makes sense.
Now, I understand why Automattic came out of nowhere earlier this week with an ultra-aggressive strategic move to increase bandwidth for WordPress.com users to 3GB – a move that will likely force rival TypePad to follow suit.
According to GigaOm, Automattic and blog/boy wonder Matt Mullenweg has raised $29.5-million from a group of investors that includes The New York Times.
I’m not sure how I feel about the NYT becoming an investor in Automattic/Wordpress. On one hand, it seems strange to have a traditional media organization have a stake in WordPress. I mean, come on, this is WordPress – the open-source project that we all know and love, right!
On the other hand, it is the NYT – one of the best media organizations in the world and an enthusiastic WordPress user. (About.com guides are published using WordPress, and the NYT has more 50 WordPress-powered blogs.)
So, what does WordPress do with all that dough other than buying a few more servers and upgrading its Akismet anti-spam service?
Does this signal a major change in how Automattic deals with WordPress and the fee-based services it offers. My sense is we can expect the “ah shucks, we’re WordPress” approach to change as Automattic becomes a serious business looking for serious revenue.
And maybe it’s time for Automattic to be looking at some serious acquisitions. A solid publishing tool would be a start. Who knows, maybe Automattic will get into the online advertising business given it generates so much traffic and has such a strong brand. GigaOm suggests that Automattic could also launch a social networking business. With $29.5-million in the bank, the company has the ability to do some interesting deals.
All in all, there are interesting times ahead for Automattic and WordPress. If I were TypePad (and maybe Blogger), I’d be very worried.
For more, check out Mullenweg’s blog.
Update: The financing values Automattic at $150-million to $200-million. Some of the money will be used to cash out some of the company’s investors – CNet being one of them.
