Connect with us

Published

on

Automattic founder, Matt Mullenweg

Source: Automattic

Matt Mullenweg, who turned 40 in January, has now spent more than half his life working on WordPress. He’s never had such an insane two weeks.

WordPress, best known as a leading content management system, has hundreds of millions of sites currently using its templates, tools and plugins. But the WordPress universe is a complicated mishmash of open-source products, nonprofits, for-profit companies, trademarks and licenses.

The typically quiet but extremely important part of the internet — WordPress powers roughly 40% of all websites — has suddenly emerged as a major source of tech industry drama, threatening to upend an ecosystem that’s long been viewed, from the outside at least, as collegial, thanks to its longevity and the various fun-loving camps and learning sessions it hosts every year.

While WordPress’ technology is open source, meaning anyone can install it and use it for free, Mullenweg is also founder and CEO of Automattic, a venture-backed startup valued at $7.5 billion, as of 2021. WordPress.com is Automattic’s central businesses, and individuals and companies pay anywhere from $4 a month to over $25,000 a year for services like ad products, security, customer support and inventory management.

The saga that burst into public view in September featured the normally mild-mannered Mullenweg as its central character in a battle with WP Engine, one of the leading providers of WordPress hosting. Silicon Valley private equity firm Silver Lake bought a majority stake in WP Engine in 2018, investing $250 million and obtaining three board seats.

“I’ve been doing WordPress for 21 years, I have good relationships with every other company in the world,” Mullenweg said in an interview this week with CNBC.

WP Engine’s offense, according to Mullenweg and a cease-and-desist letter his attorneys sent to the company on Sept. 23, revolves around years of trademark violations and WP Engine’s claim that it’s bringing “WordPress to the masses.”

“We at Automattic have been attempting to make a licensing deal with them for a very long time, and all they have done is string us along,” Mullenweg wrote in a Sept. 26 post on his personal website, ma.tt. “Finally, I drew a line in the sand, which they have now leapt over.”

Here's how a three-month paid sabbatical can solve employee retention and burnout problems

Since then, the matter has escalated on an almost daily basis. WordPress took the drastic step of banning WP Engine from using the WordPress resources necessary to serve its customers, which preceded a lawsuit filed on Wednesday by WP Engine against Mullenweg and Automattic. Mullenweg then put out another post, calling WP Engine’s suit “meritless,” and announcing that he’d hired Neal Katyal, former U.S. acting solicitor general, for legal defense.

Tomasz Tunguz, a venture capitalist and founder of Theory Ventures, says the conflict speaks to the perpetual challenge of open-source software.

“What are the legitimate ways of monetizing open source and does the commercial entity created by the authors — how much control should they have with the commercialization efforts?” Tunguz said. In this case, “hundreds of millions in revenue is at stake between the two,” he added.

‘Silver Lake doesn’t give a dang’

In Mullenweg’s telling of the brouhaha, the battle has been years in the making. He’s been actively trying to strike a deal since January and finally got fed up, he said.

But to the outside world, it all felt very sudden. Mullenweg first referenced the matter in public on Sept. 17, in a blog post ahead of WordCamp, the largest annual gathering in the U.S. of WordPress users. The four-day event took place in Portland, Oregon, beginning on Sept. 17.

In the post, Mullenweg criticized WP Engine for not contributing enough back to the WordPress ecosystem. He said that Automattic contributed 3,786 hours per week to WordPress.org, (“not even counting me!”) compared to 47 hours for WP Engine.

For businesses and developers considering who they want to support, Mullenweg had this message: “Silver Lake doesn’t give a dang about your Open Source ideals. It just wants a return on capital.”

A Silver Lake spokesperson said WP Engine was handling all inquiries. A WP Engine representative referred to the company’s complaint against Automattic and Mullenweg, filed on Oct. 2. The spokesperson highlighted the introduction of the complaint.

“This is a case about abuse of power, extortion, and greed,” the filing begins. “The misconduct at issue here is all the more shocking because it occurred in an unexpected place — the WordPress open source software community built on promises of the freedom to build, run, change, and redistribute without barriers or constraints, for all. Those promises were not kept, and that community was betrayed, by the wrongful acts of a few—[Matt Mullenweg and Automattic]—to the detriment of the many, including WPE.”

On Sept. 20, three days after Mullenweg’s initial post, the WordPress founder showed he wouldn’t be backing down.

In his keynote, at an event that attracted an estimated 1,500 WordPress fanatics, Mullenweg warned the audience upfront that it “might be one of my spiciest WordCamp presentations ever.” After reading out his prior blog post, Mullenweg took swipes at Silver Lake, even naming a partner at the firm, Lee Wittlinger, as the man behind WP Engine, comparing him to a “schoolyard bully.”

Prior to taking questions, Mullenweg said of WP Engine’s presence at WordCamp, “they’re not going to be at future ones, I don’t think.”

Gap between closed-source and open-source AI companies smaller than we thought: Hugging Face

He wasn’t done.

The next day, in a post titled, “WP Engine is not WordPress,” Mullenweg wrote that even his mother didn’t know the difference, and he said WP Engine is “profiting off of the confusion” and “needs a trademark license to continue their business.”

His mom wasn’t the only one confused.

Bob Perkowitz, president of environmental nonprofit ecoAmerica, told CNBC that he’s known Mullenweg for 16 years and is even an investor in Automattic. For a number of his organizational and personal websites, Perkowitz said he’s long been a WP Engine customer. Tuning in remotely, he heard Mullenweg’s WordCamp presentation.

“I always thought that was part of WordPress,” Perkowitz told CNBC in an interview, referring to WP Engine. “They’re misleading, and they don’t contribute to the community.”

Perkowitz said he’s having his website administrator migrate all of the websites to different hosting companies.

Following Mullenweg’s presentation, WP Engine sent Automattic’s legal chief a cease-and-desist letter on Sept. 23, due to what the company called Mullenweg’s self-described “scorched earth nuclear approach.” The letter said Mullenweg had demanded a payout of a “very large sum of money” before his WordCamp keynote, and WP Engine didn’t pay up.

The letter said Mullenweg’s “false, misleading, and disparaging statements are legally actionable.”

Two days later, Mullenweg wrote on the WordPress.org site that WP Engine had been banned, meaning it “no longer has free access to WordPress.org’s resources.” Mullenweg encouraged WP Engine’s thousands of customers to contact the company “and ask them to fix it.”

WordPress then temporarily unblocked WP Engine and gave it until Oct. 1 to agree to terms of a licensing agreement, which Mullenweg made public. The crux of the deal is that WP Engine would agree to a royalty fee of 8% of monthly revenue to Automattic or commit 8% of revenue “in the form of salaries of WP Engine employees” working on WordPress features for WordPress.org.

No deal was made. The ban went into effect Oct. 1.

To the universe of WP Engine customers, Mullenweg’s actions were harsh and clumsy. Mullenweg says that what his critics don’t understand is how long he’s been trying to come to a deal.

“They’ve been delaying forever,” Mullenweg told CNBC. He decided, “I’m going to finally start talking about the evil stuff you’re doing unless you talk to me,” he said.

Fighting back

Far from negotiating, WP Engine on Wednesday filed its explosive lawsuit against Mullenweg and Automattic.

WP Engine accuses Mullenweg of slander and libel due to his public comments and says the WordPress founder has numerous conflicts of interest in how he runs the community and his company, give the open-source nature of the technology.

“Over the last two weeks, Defendants have been carrying out a scheme to ban WPE from the WordPress community unless it agreed to pay tens of millions of dollars to Automattic for a purported trademark license that WPE does not even need,” the lawsuit says. “Defendants’ plan, which came without warning, gave WPE less than 48 hours to either agree to pay them off or face the consequences of being banned and publicly smeared.”

Following WP Engine’s demands for a jury trial in its 61-page lawsuit, Mullenweg fired back, describing the complaint as “baseless” and “flawed, start to finish.”

On his personal website, Mullenweg acknowledged that the ordeal was causing a big internal clash at his company.

“It became clear a good chunk of my Automattic colleagues disagreed with me and our actions,” Mullenweg wrote.

He says he made the decision to offer buyout packages for anyone who resigned before early afternoon Thursday, offering $30,000 or six months of salary, whichever is higher. Anyone who took the deal wouldn’t be eligible to “boomerang,” a term for getting rehired.

Mullenweg said that 159 people, or 8.4% of the workforce, took the offer while the 91.6% who opted to stay turned down a collective $126 million.

Mullenweg concluded by saying, “now I feel much lighter.”

“I’m grateful and thankful for all the people who took the offer, and even more excited to work with those who turned down $126M to stay,” Mullenweg wrote. “As the kids say, LFG!”

Mullenweg may be openly enthusiastic and grateful for the employees he still has on board, but the WordPress community is a mess. Many WP Engine customers are suffering, and Automattic is gearing up for a legal fight against a private equity firm with over $100 billion in assets.

WATCH: An open-source future

AI's Open-Source Future

Continue Reading

Technology

Ether rises to a fresh record, bitcoin erases gains from Jackson Hole rally

Published

on

By

Ether rises to a fresh record, bitcoin erases gains from Jackson Hole rally

Jakub Porzycki | NurPhoto | Getty Images

Ether rose to a new record over the weekend, after hitting an all-time high Friday for the first time since 2021.

The price of the second largest cryptocurrency rose as high as $4,954.81 on Sunday afternoon. It was last higher by less than 1% at $4,776.46.

Meanwhile, bitcoin at one point erased all the gains from its Friday rally, falling as low as $110,779.01, its lowest level since July 10. It was last trading lower by nearly 2% at about $112,000. The flagship cryptocurrency hit its most recent record of $124,496 on Aug. 13.

Stock Chart IconStock chart icon

hide content

Ether (ETH) and bitcoin (BTC)

On Friday, crypto rocketed with the broader market after Federal Reserve Chair Jerome Powell hinted at upcoming rate cuts and investors returned to risk-on mode. Ether surged 15% and bitcoin gained 4%.

Ether, rather than bitcoin, has been leading the crypto marker for several weeks thanks to regulatory tailwinds, a boom in interest in stablecoins and buying en masse by a new cohort of corporate ether accumulators. On Saturday, Bitmine Immersion Technologies, the ether treasury company chaired by Wall Street bull Tom Lee, bought $45 million of ether, according to crypto data provider Arkham.

That shift in leadership has helped sustain ETH, which has sustained the $4,000 level this month after unsuccessfully testing the resistance mark a handful of times since 2021.

“The buyers are finally bigger than the sellers,” said Ben Kurland, CEO at crypto research platform DYOR. “ETH ETFs are drawing steady inflows, and public companies are beginning to treat ETH as a treasury asset they can stake for yield — a stickier form of demand than retail speculation.”

“Additionally, nearly a third of supply is locked in staking, scaling solutions are mature and, with rate cuts back on the table, the cost of capital is falling,” he added. “Those forces turned $4,000 from a resistance level into a foundation for re-pricing ETH’s next chapter.”

Don’t miss these cryptocurrency insights from CNBC Pro:

Continue Reading

Technology

How the U.S. space industry became dependent on SpaceX

Published

on

By

How the U.S. space industry became dependent on SpaceX

SpaceX is valued at around $400 billion and is critical for U.S. space access, but it wasn’t always the powerhouse that it is today.

Elon Musk founded SpaceX in 2002. Using money that he made from the sale of PayPal, Musk and his new company developed their first rocket, the Falcon 1, to challenge existing launch providers.

“There were actually a lot of startup aerospace companies looking to take on this market. They recognized we had a monopoly provider called United Launch Alliance. They had merged the Boeing and Lockheed rocket launch capacity to one company, and they were charging the government hundreds of millions of dollars to launch satellites,” said Lori Garver, a former deputy administrator at NASA.

In 2003, Musk paraded Falcon 1 around the streets of Washington hoping to attract the attention of government agencies and the multi-million dollar contracts that they offered. It worked, and in 2004, SpaceX secured a few million dollars from the Defense Advanced Research Projects Agency, or DARPA, and the U.S. Air Force to further develop its rockets.

Despite the government support, the company struggled. Its first three launches of the Falcon 1 failed to reach orbit.

“NASA, and specifically the the initial commercial cargo contract, is what saved the company when it was on the brink of bankruptcy,” said Chris Quilty, president and Co-CEO of Quilty Space, a space-focused research firm.

NASA awarded the $1.6 billion contract, known as Commercial Resupply Services to SpaceX in 2008, just months after the first successful flight of the Falcon 1. The contract called on SpaceX to use its new rocket, the Falcon 9, along with its Dragon capsule to ferry cargo and supplies to the International Space Station over the course of 12 missions. In 2014, SpaceX won another NASA contract worth $2.6 billion to develop and operate vehicles to ferry astronauts to and from the International Space Station.

Today, SpaceX dominates large parts of the space market from launch to satellites. In 2024, SpaceX conducted a record-breaking 134 orbital launches, more than double the amount of launches done by the next most prolific launch provider, the China Aerospace Science and Technology Corporation, according to science and technology consulting firm BryceTech. These 134 launches accounted for 83% of all spacecraft launched last year. According to a July report by Bloomberg, SpaceX was valued at $400 billion.

SpaceX’s Dragon capsule and Falcon 9 rocket are the primary means by which NASA launches astronauts and supplies to the International Space Station. The company’s Starlink satellites have become indispensable for providing internet access to remote areas as well as to U.S. allies during wartime. The company’s Starship rocket, though still in testing, is also key to the U.S. plan to return to the moon. SpaceX is also building a network of spy satellites for the U.S. government called Starshield as part of a $1.8 billion contract. Even competitors including Amazon and OneWeb have launched their satellites on SpaceX rockets. 

“The ecosystem of space is changed by, really it’s SpaceX,” Garver said. “The lower cost of access to space is doing what we had dreamed of. It is built up a whole community of companies around the world that now have access to space.”

Watch the video to find out more.

Continue Reading

Technology

Cybersecurity firm Netskope files to go public on the Nasdaq

Published

on

By

Cybersecurity firm Netskope files to go public on the Nasdaq

Sanjay Beri, chief executive officer and founder of Netskope Inc., listens during a Bloomberg West television interview in San Francisco, California.

David Paul Morris | Bloomberg | Getty Images

Cloud security platform Netskope will go public on the Nasdaq under the ticker symbol “NTSK,” the company said in an initial public offering filing Friday.

The Santa Clara, California-based company said annual recurring revenue grew 33% to $707 million, while revenues jumped 31% to about $328 million in the first half of the year.

But Netskope isn’t profitable yet. The company recorded a $170 million net loss during the first half of the year. That narrowed from a $207 million loss a year ago.

Netskope joins an increasing number of technology companies adding momentum to the surge in IPO activity after high inflation and interest rates effectively killed the market.

So far this year, design software firm Figma more than tripled in its New York Stock Exchange debut, while crypto firm Circle soared 168% in its first trading day. CoreWeave has also popped since its IPO, while trading app eToro surged 29% in its May debut.

Read more CNBC tech news

Netskope’s offering also coincides with a busy period for cybersecurity deals.

The year’s two biggest technology deals include Alphabet’s $32 billion acquisition of Wiz and Palo Alto Networksambitious plan to buy Israeli identity security company CyberArk for $25 billion.

Founded in 2012, Netskope made a name for itself in its early years in the cloud access security broker space. The company lists Palo Alto Networks, Cisco, Zscaler, Broadcom and Fortinet as its major competitors.

Netskope’s biggest backers include Accel, Lightspeed Ventures and Iconiq, which recently benefited from Figma’s stellar debut.

Morgan Stanley and JPMorgan are leading the offering. Netskope listed 13 other Wall Street banks as underwriters.

Continue Reading

Trending