Matthew Mullenweg, founding father of Wordpress, had some nice insights on how to scale your business as a webstartup during FOWA. His presentation (to be found here) ranged from the technical side of scaling to the business side of scaling. In this business side he had some interesting insides that I a) didn’t know Wordpress did and b) hadn’t even ever thought about doing.

When we talk about Wordpress there are two products that can be recognized; Wordpress.org is the software that you can run on your own server, and Wordpress.com is the hosted solution for the less tech savvy people amongst us. When talking about scaling his business, Matt was talking about Wordpress.com which was gained users in exponential rate in the last few years.

Obviously at a certain time, any web application developer and decent entrepreneur will consider advertisement. In the age of Google with their Google-Adsense, ads have proven to be a successful stream of revenue for webapps, especially if your app has a big uptake on traffic. Still, many entrepreneurs that started with a social concept and a gathered a solid community will be hesitant about subjecting their loyal users to ads. As a result some find a different source of revenue (selling your statistics?) while others make Pro packages that let users get rid of the ads.

Wordpress.com went in an other direction when they made a clear distinction between loyal users and people reaching their blogs by accident. They noticed that a certain big percentage of their page visits came through search engines like Google. Clearly these people were already presented with ads at those points and adding the same kind of adds to the Wordpress page could be leveraged as some kind of second-level advertising. The cool thing about this though is, that by only offering these ads to people coming from the search engines, the loyal users and readers of Wordpress.com blogs were spared the advertisements and the annoyance.

The logic behind all this is pretty solid. People searching for something might actually be interested in the relevant product that is presented in the ads next to the articles. Loyal readers though will most of the time come to the site no matter what the content was as they are more interested in the user that writes the blog. This is enhanced by the effect that RSS feeds have on people actually being loyal readers no matter what someone writes.

Therefore, only offering ads to the people that are proven to be more likely to click on them makes perfect sense. The result is that when you are a Wordpress.com author or loyal reader, you will rarely even know there are ads.

Thank you Matt for this cool idea, and for saving us bloggers from a world of advertisements!

This entry was posted on Sunday, October 7th, 2007 at 1:10 and is filed under FOWA, advertisement, business, event, wordpress.