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1. Difference in Business Models

• WordPress:
  • It is open-source and available for free, allowing anyone to download and use it.
  • Additional functionalities are extended through plugins, themes, and web hosting services, which are mostly provided by third-party vendors.
  • Since WordPress itself offers the platform for free, its direct revenue model is limited.
  • Automattic (the parent company of WordPress) generates revenue mainly through paid services like WordPress.com, Jetpack, and WooCommerce.
  • As a result, despite high user market share, WordPress has a structure where corporate value is not easily reflected.
• Shopify:
  • It operates on a SaaS (Software as a Service) model, where users pay a monthly subscription fee.
  • Shopify provides an all-in-one solution, including hosting, payment processing, theme and plugin marketplaces, and marketing tools.
  • Additionally, Shopify secures steady revenue through payment processing fees (Shopify Payments) and app store earnings.
  • The more transactions happen on the platform, the more revenue Shopify earns on an ongoing basis.

2. Profitability and Business Scalability

• WordPress:
  • The majority of WordPress-based websites are managed by small-scale developers or web hosting companies who directly generate revenue.
  • WordPress itself relies on community-driven growth and has limited revenue from platform operations.
• Shopify:
  • Shopify provides robust e-commerce solutions targeting both small and large businesses, generating recurring revenue through subscriptions and transaction fees.
  • Shopify’s ecosystem maximizes revenue potential after the storefront is established (payments, shipping, marketing, etc.), making it highly scalable.
  • The Shopify revenue model is stable and repeatable, making it attractive to investors.

3. Investor Evaluation of Corporate Value

• WordPress:
  • WordPress relies on open-source contributions and independent developer ecosystems.
  • Automattic (WordPress operator) is a private company, limiting its corporate valuation evaluation.
  • WordPress generates revenue primarily through add-on services (WordPress.com, Jetpack, etc.), leading to relatively lower corporate value.
• Shopify:
  • Shopify is a publicly traded company, and investors evaluate its corporate value based on revenue growth and profitability.
  • Shopify is highly regarded among tech stocks for its stable revenue model and strong growth.
  • Despite a smaller user base compared to WordPress, Shopify maintains a higher corporate value thanks to its direct revenue generation model.

4. Primary Users and Market

• WordPress:
  • It is used by websites of all sizes, including blogs, content-focused sites, and even e-commerce with WooCommerce, but it requires customization.
  • Most users are individuals or small businesses looking to reduce costs.
• Shopify:
  • It specializes in e-commerce, providing users with an environment to quickly build and manage online stores.
  • Shopify serves both small businesses and large enterprises, creating an ecosystem centered around e-commerce.

Conclusion