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Automattic expects to make $45 million in revenue this year (allthingsd.com)
44 points by krogsgard on Apr 25, 2012 | hide | past | web | favorite | 16 comments

How on earth do they keep such low turnover when these people have to work with the wordpress codebase?

Black Magic? Holding their families hostage?

Seriously though: I'm very interested in how they manage this company and the distributed employees as they are obviously doing a lot of things right.

Every employee at Automattic has a trial period before they announce they've been hired. It usually includes a test project for designers and programmers. I'm sure that's a helpful filter. Then, when the employee starts, they spend some amount of time (I think a couple weeks) doing support, no matter what their actual job is.

'm sure working from home helps limit turnover too. Also, they work in teams, and I'm sure that's fun. And I've never noticed anyone mention things like logging time either - I think they get assigned work and as long as you get it done, time isn't an issue.

And finally the people that work for Automattic tend to be really really passionate about WordPress in the first place, so I'm sure working for the most influential company to the WordPress.org project(Automattic / wp.com), doing WordPress stuff all day, is pretty awesome.

As an Automattician: yes to all of the above.

Also, I get to work with really smart people that are driven to improve themselves, their co-workers, and the company's products. That's the #1 reason for the low turnover.

"The company is profitable, and expects to bring in $45 million in revenue this year, according to CEO Toni Schneider and founder Matt Mullenweg."

What's hiding behind that revenue number. The co. is "profitable". Is the company going to make $10 in profit or $10 million in profit this year?

Well, they're completely distributed with little physical overhead. With 100 employees and the only other primary cost being servers, I'd guess they're doing alright.

Isn't employee salary the #1 expense for most tech companies? And isn't the rule of thumb about $160,000 per year per employee on average, and that's assuming high-end engineer types? By that metric they'd need $16 million per year just to pay salaries. $45 million income is 2.8 times what's needed for salaries, which leaves plenty for profit.

I almost went down that route. I interact with a lot of Automattic employees, and all of them are extremely talented.

I'm not sure what they get paid, but I tend to doubt it averages $160k, because if I were Automattic I'd probably pay relative to where the employee lives. And even though I'm sure most of them could command top dollar where they live for what they do, I'd bet in most parts of the world it comes out to less than $160k / year, because most parts of the world just are not as expensive as SF.

Also, I'm pretty sure they have thousands and thousands of servers. I have no idea how much that costs, but an uneducated guess would be that it's not as much as the $16 million in salaries you mention. So... $45 million - $32 million for salary and servers is indeed a hefty profit.

I highlighted their difference with Tumblr here not too long ago: http://news.ycombinator.com/item?id=3809374

They both use Quantcast, so the numbers have to be pretty accurate.

A lot of Tumblr pageviews are dashboard based, whereas WordPress.com's tend to be much more front facing. Also, I imagine the amount of time a Tumblr user spends per page is less than those on WP - just by typical nature of the content. Just guessing, but that's my assumption.

Mullenweg has said before he pictures Tumblr as more of a social network than a blogging platform. I wish I could find that right now. Either way, WordPress.com is definitely learning some things from Tumblr. The new wp.com dashboard and quick posting mechanism is enough proof of that.

You are right, hence the reason they redirected the dashboard stats to wordpress.com. I think they're gunning for an IPO or sale.

I personally don't think so based on my observation of the company over the past few years. I think they're in it for the long haul, as are their investors. However, I don't have much to back up my statement, other than Matt's ideals.

The firm holds a longer, (financially) non-optimal view; their handling stakeholders would be different if they were gunning for an exit. Instead, Wordpress seem to be presenting for (private; less volatile) investment (but I don't know what for?).

That's a magnificent $0.65 a blog...per year...in gross revenue.

They are still trading revenue for growth... For consumer companies, that's a pretty well trodden path. There's value creation and value extraction. I can say, knowing some folks at WordPress, that they've been utterly focused on value creation since the get-go (makes sense given that they doubled the # of blogs they host in the past year). As the article states, they just hired a CFO and a general counsel. Money quote (literally):

"West will be in charge of all things financial and operational. “When you see this much usage, you know there’s an extraordinary revenue opportunity,” he told me."

Silly semantics.

You could also see it as a magnificent $0.65 per page. After all, a blog is just a dynamic page outputting database records, right?

You could also see it as a magnificent $0.65 per page.

Well...no. Not at all. It isn't semantics at all, anymore than saying that The McClatchy Company operates 30 newspapers.

Further the other comment opines that they're focused on growth. That seems incredible given that the blogging industry is on decline.

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