Automattic Spurns $200 Million Acquisition Offer

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1. Chris
   

   October 29th, 2007 at 6:24 pm

   I’m glad to hear that actually. Any news on who the potential buyer was?

   Wordpress is a great platform, and one of the few blogging platforms that are completely free, easy to use, and have a huge community backing them up. I would hate to see them gobbled up by a big corp. that has no plans to keep things going.

   For example, I’d hate to see Google or Microsoft pick them up and just swallow them up so there is less competition for Blogger and MSN Live Spaces. I hope this is a sign they plan to keep on doing what they’re doing and maybe eventually go IPO on their own…

2. Sammy
   

   October 29th, 2007 at 6:24 pm

   When you say they just raised $1.1 mill, you mean in 2005? At least that’s the data you have listed on the company fact sheet.

   In any case, if the company has only raised $1.1-2.2 mill, this seems like a great payout. If anything is to be learned from the last boom - take the money when it is at such a large multiple, and work on a new idea without the bane of raising capital, boards that may panic at a the turn of the market etc.

   Anyways, not my $200 mill to gain or lose, so commenting is easy

3. Frank Sinton
   

   October 29th, 2007 at 6:26 pm

   Wordpress just rocks as a videoblogging platform too.

   Who did they turn down?

4. Jon
   

   October 29th, 2007 at 6:26 pm

   I fear they think they are now the next facebook! Somebody offered me 200M, I would take it and live off the interest for the rest of my life… the difference between 200M and 1B to be honest is very little… you can only spend so much money during a lifetime.

   Jon

5. Calvin
   

   October 29th, 2007 at 6:26 pm

   yup, wordpress is a great platform, hopefully they are doing well, same with Chris, I hate it when Google and Microsoft acquire smaller companies, feedburner, sketchup, and many more. they just end up like the Dodo bird. leave them alone.

6. Andrew
   

   October 29th, 2007 at 6:38 pm

   They turned out Facebook

7. Chris R.
   

   October 29th, 2007 at 6:42 pm

   Was this a real offer or is this like the 15B valuation from 250M investment, referring to the recent facebook press release?

   Techcrunch was recently valuated at 100M based on very little as well.

   So I restate the question, is this release about a rejected offer genuine or is it press for a non-existant valuation. I saw their offices on one of scoble’s videocasts, and they DID NOT look like offices of a 200M company to say the least.

8. Chris R.
   

   October 29th, 2007 at 6:47 pm

   Somebody was offering to buy out us and a property of ours for 7 figures a little over a year ago. We were also going to be the North american distributer for Mandrake Linux in Jan 2007.

   Those deals didn’t pan out, and I didn’t exactly announce them to the public. Why would somebody announce something like that. A bad deal and you announce it in a press release????

   nooo.. .oooooo…..oooooo…….

   Sounds like what facebook did a few months back before they stepped it up and did more to facade investor confidence. Will Scoble be doing automatic pimping daily now too?

   Fool me once shame on you…. wait, I wasn’t even fooled the first time.

9. Michael Arrington
   

   October 29th, 2007 at 6:51 pm

   Chris R., you are very demanding in your comments. I believe everything was answered in the post.

10. Chris R.
    

    October 29th, 2007 at 7:12 pm

    “has rejected a $200 million acquisition offer, says multiple sources. Half the price was to be paid in cash, half in stock in the buyer.”

    Why have multiple sources suddenly come forward with this??

    You know how deals go. Employees don’t negotiate them. Lawyers and execs do. They don’t run around talking about deals that don’t go through.

    I will use an example of low importance. We were going to be Mandriva Linux USA and Canada and had a deal in 2007. We let it go for various reasons. Mandriva is a great company, but we had to let it go.
    http://www.beercosoftware.com/bcsdeal.pdf

    I never leaked this deal, until right now. What is the point? Why would other people know about that. Deals are between execs, lawyers and that’s it. I was under no NDA on this one, and I’m sure they found some other great company, but I you know how I like to talk and I just wouldn’t even see the point???

    Why?

11. Chris R.
    

    October 29th, 2007 at 7:13 pm

    Unless you were starting to push blogs to get a valuation out to the public like facebook started doing months ago. If that’s the case, then fine. If I am missing something in what you wrote or was supposed to read between the lines, then please let me know what I missed?

12. thebusinessofsoftware.net
    

    October 29th, 2007 at 7:28 pm

    OMG!

    And I too still wonder how open source products like wordpress make money.

    I know that MySQL is now selling licences to enterprises. And RedHat sells support because linux is obviously complex to get going.

    But something like a blog/forum!?

    The wordpresses of the world are certainly affecting the market for those who aren’t giving stuff away for free.

    And somebody offered them $200 million. That’s certainly newsworthy.

    Maybe they don’t like money?!

13. Trace
    

    October 29th, 2007 at 7:37 pm

    What can you say about wordpress that hasn’t already been said a million times? Love it to death. @Chris: You are annoying, stop hijacking threads.

14. softwareco
    

    October 29th, 2007 at 7:55 pm

    @ChrisR - who cares about a software company pretending to a beer company … go away and stop trolling on TC and TC forum.

15. Nikolay Kolev
    

    October 29th, 2007 at 7:56 pm

    #12: Those “investors” probably haven’t heard of that now everybody’s talking about forking WordPress and the new Habari Project:

    http://www.habariproject.org/

    They also haven’t heard of MovableType/Sixapart, probably.

16. statscrunch
    

    October 29th, 2007 at 8:05 pm

    Mike,

    Why don’t you look at Quantcast numbers… Wordpress ‘exact’ traffic numbers are shown….

    http://www.quantcast.com/wordpress.com

    That tells the story of their success. Good for them, keep up the growth!

17. tim
    

    October 29th, 2007 at 8:24 pm

    A great confirmation to the open source business model. Best of luck to them.

    Magento - Open Source eCommerce
    http://www.magentocommerce.com

18. Chris R
    

    October 29th, 2007 at 8:26 pm

    I am going to ask one more time - is this valuation real? Like, as real as my totally awesome search engine platform, the A.S.S.H.A.T.?

    Trollz 4 life! BeerCoSoftware Rulez!

19. Chad
    

    October 29th, 2007 at 8:27 pm

    It’s been my suspicion that they have pretty healthy revenues from akismet and the WP upgrades/gifts (eg $15/yr to use custom CSS).

20. yongfook
    

    October 29th, 2007 at 8:31 pm

    “So I restate the question, is this release about a rejected offer genuine or is it press for a non-existant valuation. I saw their offices on one of scoble’s videocasts, and they DID NOT look like offices of a 200M company to say the least.”

    Pray tell, what do the offices of a 200MM company look like? Inquiring minds want to know. Piles of cocaine dotting the reception? A fussball table made entirely of unicorn ivory? A vending machine that pumps out foie gras and bathroom taps that dispense krug?

21. Eric Skiff
    

    October 29th, 2007 at 8:34 pm

    Good for them. Matt and the Automattic team are nothing but awesome and I’m glad to see them continue to make their own way.

22. Tuyen Vo
    

    October 29th, 2007 at 8:37 pm

    Why are people hatin’? If Autommatic turned down a $200M offer and can survive then good for them. I suspect that since they’ve only raised a small amount (less than $2M) and have not gone back for more funding, they don’t need the money.

    And let’s remember that great products with legs don’t pop up every day. If they are lucky enough to have one, why not hold out? I’m not a Facebook fan, but remember a year and a half ago when people said they should sell out for $500M like MySpace? Guess what, they got their $500M from Microsoft and the PE guys and only had to give up less than 4% of their company. Who are dumbo’s now - the pundits back then or Facebook management?

23. Tuyen Vo
    

    October 29th, 2007 at 8:37 pm

    Also, let’s not forget that valuations are not based on revenues or profits - they are based on what the highest bidder is willing to pay…

24. Trace
    

    October 29th, 2007 at 8:48 pm

    @yongfook Post# 20: Thank you, my thoughts exactly.

25. Ed Sutherland
    

    October 29th, 2007 at 8:56 pm

    Can you provide a bit more details on the “multiple sources”? Are they knowledgeable about the negotiations, are they insiders, are they vc?

26. Steve Ballmer
    

    October 29th, 2007 at 9:29 pm

    Now that takes some nads!

    http://fakesteveballmer.blogspot.com

27. Omar
    

    October 29th, 2007 at 9:31 pm

    Automattic is definitly worth more than $200M. With nearly 100 million people visiting their blog platform every month they can easily go to a paid model and advertising model and make that amount in a YEAR. Then go public. My valuation of the company is $1 billion just on the 100m/people monthly and what can be done with that!

28. LonelyBloggers
    

    October 29th, 2007 at 9:42 pm

    There’s no way Matt and group would sell for that amount - Never mind revenue, they have a huge installed base as per Omar’s previous comment… WP is nothing short of massive… Shame on the company that thought they could pull a fast one… Take a look at valuations out there (good or bad) but if you use the same logic - $200 would be a steal of a deal..

29. PJ
    

    October 29th, 2007 at 10:23 pm

    Go Austin, Texas!

    I predicted the Gravatar thing over a year ago, it won’t be complicated to do something more cool than MyBlogLog.

30. Fabian Schonholz
    

    October 29th, 2007 at 10:26 pm

    If I was ever in the shoes of Automattic to turn down $100M cash and $100M in stock I would tell you what would do. Regardless, it is ballsy to do it. I hope it pays off for them.

31. Joe Hunkins
    

    October 29th, 2007 at 11:05 pm

    Good for them, they are worth far more. WP and askimet anti-spam are brilliant and Matt and his gang are a kick-ass team. In some ways WP is a social network with huge staying power, and as such is worth an enormous amount.

32. Andy Beard
    

    October 29th, 2007 at 11:47 pm

    This is called under the radar link buying

33. Christian
    

    October 30th, 2007 at 12:03 am

    Matt said at this years Wordcamp that Akismet and business use like NY Times pay the bills. WP rocks.

34. MeetingFlex.com
    

    October 30th, 2007 at 12:28 am

    Way to go….automattic.

    http://www.meetingflex.com
    Social Networking + Video - Crap

35. Christian Mohn
    

    October 30th, 2007 at 3:27 am

    As interesting as this might be, the speculation is regarding Automattic and Wordpress.com not the Wordpress codebase. There is, or at least should be, a difference there.

    Claiming this as “A great confirmation to the open source business model.” as Tim does above doesn’t really hold water though, as wordpress.com isn’t open source. The service is based on open source software, but Wordpress.com isn’t open source in itself. Sure, some of the work being done by Automattic trickles back to the Wordpress codebase but thats being done on a case-by-case basis.

    Everyone could potentially set up a service like Wordpress.com, based on any given open source platform, and make a bundle on it. While I applaud entrepreneurs to are able pull it off like this, this doesn’t have much to do with open source as much as it has to do with timing and providing a service people want.

    In many ways, Wordpress.com isn’t much more open source than Facebook is, the only real difference is that the core service on Wordpress.com is based on a open source platform.

    In my view this even further highlights the problem with differentiating Wordpress.com/Automattic (the business side) and Wordpress.org (The open source project).

36. Chris R.
    

    October 30th, 2007 at 4:29 am

    18 isn’t me.
    I’m still doubtful about this the morning after. It still looks like a valuation attempt to me. When deals go bad, you don’t leak them to multiple sources to publish in press releases unless there is an ulterior motive.

37. Christian Mohn
    

    October 30th, 2007 at 4:58 am

    Would Automattic have ulterior motives? Never…

38. Dan Schawbel
    

    October 30th, 2007 at 6:32 am

    Sounds like another Facebook fiasco.

39. Jeremy Toeman
    

    October 30th, 2007 at 6:34 am

    I love WP, even recommended having MSFT buy them in a recent post of mine.

    I just hope they don’t become “Pointcast 2.0″…

40. sputnick
    

    October 30th, 2007 at 6:38 am

    The unknown revenue is the big question. I remember a post by Duncan a couple of months back which estimated it as follows: “On the whole it’s probably not a highly profitable business”.

    http://www.techcrunch.com/2007.....en-source/

    But $200 million is a lot, even today. I wonder if the suitor knew the dollar amount Automattic is making.

41. John
    

    October 30th, 2007 at 6:40 am

    I’m glad Chris R is still beating this drum…finally a comment that’s worth reading on this site. Mike, you’re the (ex)lawyer, give us your take. Is Automattic pulling one from the Youtube, Facebook playbook?

42. orangedog
    

    October 30th, 2007 at 7:04 am

    This just increases my confidence in the longevity of WordPress.

43. Anonymous
    

    October 30th, 2007 at 8:08 am

    “Down the road, with the benefit of hindsight, we’ll know if they made the right decision or not.”

    What would we do without this insightfulness?

44. Aaron R.
    

    October 30th, 2007 at 9:45 am

    Don’t forget about Yahoo’s recent $300M purchase of the open source collaboration solution - Zimbra!

45. Nikolay Kolev
    

    October 30th, 2007 at 10:39 am

    I don’t know why every time there’s a talk about WordPress.com, people say “I love WordPress.org” - these are two different things. Most people use WordPress.org source code, not because it’s the best open-source blogging platform, but because it has the richest variety of themes and pluggins. But people are talking about forking WordPress not for pure technology reasons, but mostly because they can’t live with Matt Mullenweg’s attitude and approaches.

    I didn’t want to bring this up again, but here on this blog a couple of months ago I uncovered some facts about Matt & his gangs’ approaches. Namely, an Automattic employee has stolen my username and blog at WordPress and the using information I put in my WordPress.com account, tried to hijack other accounts with other services. Then, being pressed by their own FAQ, Automattic changed their ToS and FAQ overnight and then said to all of us: What are you guys talking about? A few people used web caching services to prove that Automattic changed their legal terms overnight to cover things up.

    This is the type of attitude that WordPress.org contributors cannot live with. Not to mention previous tricks Matt used to bring traffic to his own blog and so on.

46. Lloyd Budd
    

    October 30th, 2007 at 12:04 pm

    I don’t know anything about an acquisition offer.

    Our success so far is indeed a great confirmation to a business with open source participation at its core.

    Christian Mohn, I don’t know who suggested to you that code goes from WordPress.com to WordPress on a case by case basic. That just isn’t true. In fast that would be stupid of us, as it would create maintenance burden and risk code quality.

    The business side is all to do with the execution. Anyone with the knowledge, experience, passion and dedication our team has could do the same thing. It is all about the execution, and I’m very happy that I work with the very best.

    Could we do it without the WordPress.org community? Who knows, but many members of the team wouldn’t be interested in finding out. Myself and many members of the team wouldn’t sleep well if we didn’t feel we were living up to our potential in trying to influence the world to move towards free culture.

    All WordPress members benefit from WordPress.com and Automattic’s successes.

47. Andrew Mager
    

    October 30th, 2007 at 2:26 pm

    Good work Matt. Don’t sell!

48. publicidad en internet
    

    October 30th, 2007 at 5:31 pm

    Wordpress is a world wide leader blog platform and the Packt Open Source Content Management System Award confirms that. Its not strange that automattic receives an Acquisition Offer, automattic worths much more than 200 millions.

49. drmike
    

    October 31st, 2007 at 11:34 am

    Lloyd’s comment up there needs a disclaimer as he’s an employee of Automattic. (And they wonder why folks tell them they need an ethics policy…)

    Christian Mohn, I don’t know who suggested to you that code goes from WordPress.com to WordPress on a case by case basic. That just isn’t true.

    Um, excuse me but it is true. A lot of the code used on wp.com is not released as Open Source. The multidatabase code, the sitewide tag solution, the tag surfer, the recent news code, etc has not been brought oveer to the wordpress/ wpmu code.

    All WordPress members benefit from WordPress.com and Automattic’s successes.

    *snort*

50. Matt
    

    October 31st, 2007 at 6:00 pm

    drmike, what you call the “multidatabase code” has been released http://comox.textdrive.com/pip.....12893.html
    It’s called Hyperdb and is open source.

51. Ed Rickeds
    

    November 1st, 2007 at 7:20 am

    Every once in a while I am suckered back to the techcrunch site because of an interesting headline, then I remember why I took you out of my RSS reader and can’t stand the site. Why do you publish such crap?

52. nate
    

    November 6th, 2007 at 11:00 pm

    Wow what a stupid move. When the bubble bursts and that $200 million+ offer doesn’t comes back again Matt might be regretting this move. $200 million for an open source software package is nuts.

53. EC
    

    November 8th, 2007 at 5:02 am

    hello!
    say hello to my homepage
    http://affiliate-tyoushoshinnsha.livedoor.biz/

54. kuku
    

    November 8th, 2007 at 10:38 pm

    i glad to hear that

55. Diseño Web
    

    November 14th, 2007 at 5:57 am

    Opportunities come and go. Its very difficult the born of a new WP competitor, so they guys can say: no thanks.

    At the moment.