There’s a great conversation at WPMU.org about how to make money using WordPress MU – James starts by noting that advertising doesn’t cover the hosting costs for a massively successful site, and goes into the various other ways in which they derive revenue, including selling extra features to paid users and selling custom plugins (that are not released under the GPL). In response, Jason acknowledges that WPMU is inherently costly to run and agrees that there must be a revenue tsream, and then goes on to argue that WPMU is really a service, not a product. Therefore to make money with WPMU, he reasons, you must provide a value-added service relative to the big free hosts like wordpress.com – such as custom themes. James replies with a lengthy argument defending the decision not to release plugins under the GPL.
I don’t have much to add aside from noting that since themes have long been released without GPL, there’s no reason that plugins should be any different, especially with themes like Thesis which are “frameworks” that really blur the line between a theme and a plugin. The same can be argued for Prologue, which I use as the front end to my WPMU install at Talk Islam. The “core functions” of WP are never used in themes or plugins, so I don’t think that argument applies (think about it – why would you want to duplicate core WP functionality? why would you even need to?)
Of course, part of the problem for monetization is that you are a victim of your own succcess. James’ monthly costs for the Edublogs network are assuredly far greater than mine for Talk Islam – I can only aspire to a fraction of his success (especially since I am not running Talk Islam as a business. not yet anyway). As such Talk Islam has only a handful of user blogs – most of the activity is on the front page (where the Prologue theme gives it a dynamic, Twitter-esque feel). My goal for Talk Islam is to incorporate the Buddypress functions and ultimately create a framework for a “community platform” that would be in a sense the successor to the Daily Kos style blog community, replicating many of the features but discarding things that are broken in my opinion (such as the way the recommended diaries list is dominated by a clique of the same voices and the same topics, with very rare original and fresh perspectives). It should be noted that Shai Sachs, a very talented Drupal hacker, is working on a drupal-based blog infrastructure project for the progressive political blogsphere, but I personally believe that wordpress MU is a better platform. With Talk Islam as a prototype, we can envision a package that already includes the buddypress integration and standard theme for frontpage and user blogs that an aspiring admin could simply download and have ready to go out of the box.
The real question for monetization is the scale. How many WPMU installs are on the scale of Edublogs? Very few, I wager – but there are probably thousands like mine where the entire install can be run off a standard Dreamhost account. At that scale, Adsense ads can indeed cover hosting costs and even a modest profit on the side – not enough to pay rent, but maybe enough for cable television. Or a Starbucks addiction.
I think therefore a model for monetization presents itself. Instead of trying to monetize a single WPMU install, you monetize a packaged installation that you distribute. That installation can have Adsense code sharing so that half the revenue from ads goes to the package developer (or all if the installer doesn’t have an adsense account, there would be a box for them to paste their adsense publisher ID if they have one). For any given WPMU install the revenue will be quite modest, probably on the order of a few dollars a month. But suppose that the package was installed a hundred times? a thousand? Especially since it isn’t you who are paying the hosting fees, its the person installing the package.
Of course this means we have only punted the monetization issue downstream. But for a small WPMU site operator, recouping hosting costs is a lot easier than for a big operation like Edublogs. Users can be asked for donations, charged fees for extra features, etc just as James and Jason described in their posts. These revenue sources will be much more lucrative at the smaller scale.
As a business model, none of the above really helps James out, unfortunately 🙂 But then again, what if individual schools ran their own WPMU microsites using Edublogs software? (actually, they do.) In a sense the strategy above can be leveraged regardless of your size. All things considered, I’d rather be in James’ position of being too big 🙂