Congratulations to Automattic (the company behind WordPress). Microsoft chose not to compete with WordPress to win an unwinnable war for Internet blog platform supremacy. Instead, Microsoft gave in and it looks like they are trying to leverage WordPress’ popularity to improve the visibility of other Windows Live properties.
It is interesting to note that WordPress.com is based on the same code developed by the popular open source project (called WordPress.org). Estimates from BuiltWith show that WordPress.com’s biggest competitor is self-hosted WordPress.org blogs and together they are clearly a dominant blogging platform. The Microsoft blog post referenced below says WordPress powers 8.5% of all sites on the Internet, not just blogs. In an ironic twist, this can be thought of as an indirect way for Microsoft to use open source to compete against other Internet service providers (the enemy of my enemy is my friend, even if it is based on open source).
Windows Live and WordPress.com have worked together to build a simple way to move your blog posts, comments, and integrated photos right over to WordPress.com and start taking advantage of all their new features. And we’ll also redirect all your old Spaces URLs to your new blog, so you don’t lose any visitors along the way.