WordPress powers over 43% of all websites online, yet the core platform remains completely free and open-source. Naturally, this leads many people to wonder: How exactly does WordPress make money?
In this article, we’ll clarify the difference between WordPress.org (free software) and WordPress.com (commercial service), explore how WordPress generates revenue, and understand why this unique business model is successful. This guide will provide detailed insights while providing a comprehensive and well-researched analysis to establish credibility and trustworthiness.
WordPress.org vs WordPress.com: What’s the Difference?
It’s important to first clarify that WordPress has two distinct entities:
- WordPress.org: The open-source software you can freely download and use on your hosting. It is maintained by a global community and the WordPress Foundation, which ensures its continued development without directly generating revenue. WordPress.org is my personal favourite. Because it’s like a non profit table organisation and fully open source I like other CMS
- WordPress.com: A hosted version of WordPress, owned by Automattic, a commercial company. WordPress.com offers various premium services and is structured as a for-profit entity.
How WordPress.com (Automattic) Earns Money
1. Paid Plans and Premium Upgrades
WordPress.com employs a freemium model. Users start for free, but advanced features require paid plans:
- Custom domain names – Users can purchase domain names directly from WordPress.com, avoiding third-party registrars.
- Removing advertisements – Free sites display ads, but users can remove them by upgrading.
- Increased storage and customization – Premium plans offer more space, additional themes, and plugin support.
- eCommerce capabilities – Higher-tier plans enable users to run online stores with advanced features.
Case Study: WordPress Hosting Businesses
Companies like WP Engine have built multi-million dollar businesses by offering specialized hosting services for WordPress users. By providing optimized infrastructure, dedicated WordPress support, and security enhancements, WP Engine generates revenue while contributing to the ecosystem’s growth. This model showcases how third-party companies profit from WordPress while also supporting its development.
This subscription-based model ensures recurring revenue and is the foundation of Automattic’s business strategy.
2. Advertising Revenue
WordPress.com monetizes free sites by displaying advertisements through its own ad network, WordAds. These ads generate revenue based on impressions and clicks, much like Google AdSense. Users who wish to remove ads must subscribe to a paid plan, effectively converting ad-revenue users into paying customers. This strategy allows Automattic to earn from both free and premium users.
Recent Developments:
Recently, Automattic and WP Engine have been involved in a dispute regarding contributions to the open-source WordPress project. This highlights the complexities of maintaining a balance between community-driven development and monetization strategies. It also underscores the ongoing conversations about the role of commercial entities in the open-source space.
3. Domain Registration and Add-ons
WordPress.com acts as a domain registrar, allowing users to buy and manage custom domains directly within their dashboard. The convenience of purchasing a domain through WordPress.com often results in users opting for this service rather than using external registrars. Additional add-ons like email hosting, extra storage, and advanced design tools also contribute to revenue.
4. WooCommerce and E-commerce Services
WooCommerce, owned by Automattic, is the most popular e-commerce solution for WordPress. While the core WooCommerce plugin is free, Automattic makes money by selling premium extensions and services. These include:
- Payment gateway integrations (PayPal, Stripe, etc.)
- Subscription management tools
- Advanced shipping features
- Dedicated WooCommerce hosting plans
Additionally, Automattic offers WooCommerce Payments, a service that processes transactions while charging a percentage-based fee, further contributing to its revenue.
5. Jetpack Premium Plans
Jetpack is an all-in-one plugin that enhances site security, performance, and backups. While its basic version is free, premium plans provide additional features such as:
- Real-time backups and restores
- Malware scanning and security fixes
- Enhanced performance optimization
Jetpack subscriptions create a stable revenue stream by offering essential services to businesses and high-traffic websites.
6. Enterprise Hosting (WordPress VIP)
WordPress VIP is a premium hosting solution tailored for large enterprises, media organizations, and high-traffic websites. Unlike standard hosting plans, VIP offers:
- Managed hosting with dedicated support
- Performance optimization and security monitoring
- Integration with enterprise-grade content management tools
With pricing starting in the tens of thousands of dollars annually, WordPress VIP contributes significantly to Automattic’s revenue.
7. Affiliate and Referral Programs
WordPress.com collaborates with hosting providers and other service providers to generate affiliate revenue. When users sign up for recommended hosting services through WordPress.com, Automattic earns a commission. Additionally, it runs its own affiliate program where influencers, bloggers, and developers can earn by referring new customers to premium WordPress plans.
WordPress.com Annual Revenue Breakdown
How WordPress.org (the Foundation) Is Supported
The open-source WordPress.org software doesn’t directly generate revenue. Instead, it relies on community support and sponsorships:
- Donations from users and companies – Many companies and individuals contribute funds to the WordPress Foundation to ensure continued development.
- Sponsorships from hosting providers and developers – Web hosts, theme developers, and plugin creators benefit from WordPress and often sponsor its development.
- Community events like WordCamps – Global WordPress events raise funds through sponsorships and ticket sales, supporting the project.
Companies like Bluehost, SiteGround, Yoast, and others regularly contribute to WordPress development because their business success directly depends on WordPress’s sustainability and growth.
WordPress.org Annual Funding Breakdown
FAQs About How WordPress Makes Money
Yes, the WordPress software itself is completely free to download and use. However, using WordPress typically involves expenses like hosting, premium plugins, or themes sold by third parties.
No. WordPress.org doesn’t charge based on site traffic or success. But with WordPress.com, you may choose premium plans if you need more resources and control.
Automattic is a commercial company that operates WordPress.com. The WordPress Foundation is a non-profit responsible for the open-source WordPress software and its trademark.
Automattic, the parent company behind WordPress.com, has grown tremendously. By recent estimates, Automattic generates hundreds of millions in annual revenue and is valued in billions. Its profitability stems from premium services, advertising, and enterprise hosting.
You can directly donate to the WordPress Foundation, contribute through community events, or support companies that actively give back to WordPress.
Final Thoughts
WordPress successfully balances open-source freedom with profitable innovation. Its revenue comes from providing valuable services, upgrades, and support around the free software, creating an ecosystem beneficial for all involved. This unique model has sustained its growth, popularity, and trust for over two decades. The combination of community-driven development and commercial sustainability ensures WordPress remains a dominant force in the web industry.